Are there any interchangeable terms for 'Notice of Default' ?

13 Replies

I am in Texas and have been hitting up specific County Records online and am able to find foreclose information but no 'Notice of Default' information. Is it possible these are referred to by different terms? Google yields no answers. Thanks!

In Texas, Any notice of default or notice of acceleration is not a recorded document.  Until the notice of foreclosure is filed at least 21 days prior to the auction no public notice is needed

@Greg H. Interesting! Since this is the case, how are firms able to collect pre-foreclosure data in Texas? My goal is to target folks in pre-foreclosure in a specific area I am interested in and I would hate to use a list broker if their data is not accurate or correct at all. 

Originally posted by @Greg H.:

In Texas, Any notice of default or notice of acceleration is not a recorded document.  Until the notice of foreclosure is filed at least 21 days prior to the auction no public notice is needed

Man you gotta love Texas.  So the first (and only?) recorded doc is the notice of sale? I had no idea.  What's the lawful notice of default timeframe for the borrower? So now we have the 120 day federal rule from the CFPB, meaning no foreclosure action during that time.  How soon after that can you go to trustee's sale in TX?

I know you were asking specifically for Texas but for the sake of those hitting this post looking for info relating to other states...a NOD (or similar pre-foreclosure filing) may be found under the titles of Substitution of Trustee or Lis Pendens...depending on the state.

So the process is the first notice is the Notice of Default/ Right to Cure-  The borrower must then be given 20 days to come current-  The ruling in Texas was that this can be done during the 120 days-  Notice can be sent be certified mail and no proof of receipt is needed

After the 20 days and the 120 days total, the loan can be accelerated and the Notice of Trustee's Sale can be filed with the county.  This must be at least 21 days prior to the foreclosure auction.  The downside to this in Texas is that foreclosures only happen one day per month on the first Tuesday. So the timing is important because if the days do not fall right you have to wait another month

So with an owner occupant loan, it can be done in 120 + 21 days.  Investor loan as quick as 41 days

Originally posted by @Larry Hawkins:

@Greg H. Interesting! Since this is the case, how are firms able to collect pre-foreclosure data in Texas? My goal is to target folks in pre-foreclosure in a specific area I am interested in and I would hate to use a list broker if their data is not accurate or correct at all. 

I know that some services used to buy the information from lenders but I do not believe they can anymore.  That's why there is a mad dash during those 21 days.  People will get scores of letters and phone calls and no doubt some door knockers as well

Roddy-  They are one of the services that provides lists of properties posted for foreclosure

Originally posted by @Jim Viens :

I know you were asking specifically for Texas but for the sake of those hitting this post looking for info relating to other states...a NOD (or similar pre-foreclosure filing) may be found under the titles of Substitution of Trustee or Lis Pendens...depending on the state.

Texas is a non-judicial state and the Notice of Substitution of Trustee can be filed right before heading to the courthouse steps

Originally posted by @Greg H.:

So the process is the first notice is the Notice of Default/ Right to Cure-  The borrower must then be given 20 days to come current-  The ruling in Texas was that this can be done during the 120 days-  Notice can be sent be certified mail and no proof of receipt is needed

After the 20 days and the 120 days total, the loan can be accelerated and the Notice of Trustee's Sale can be filed with the county.  This must be at least 21 days prior to the foreclosure auction.  The downside to this in Texas is that foreclosures only happen one day per month on the first Tuesday. So the timing is important because if the days do not fall right you have to wait another month

So with an owner occupant loan, it can be done in 120 + 21 days.  Investor loan as quick as 41 days

There was a ruling in Texas that overrides the CFPB 120 day no foreclosure action? So, I'm guessing, the TX courts see the NOD/RTC as something different and apart from a foreclosure action? Very, very interesting. I'm wondering if it's possible that the CA courts would also make such a ruling. That the NOD period, which is 90 days here, can occur during that 120 days, thereby keeping our min. foreclosure time at approx. 4 months.

@Dion DePaoli Do you know anything about this?  Are states able to get around the 120 day CFPB rule by deciding that lawful and requiredl notices of default aren't "foreclosure actions"?

K.marie P.

The ruling was that the Notice of Default in Texas was not the first legal notice but that the Notice of Trustees sale , being the first public notice was. Therefore , the notice of default can be done during the 120 days

Well a Notice of Default is not a notice which requires constructive notice. (Doesn't need to be recordrd) It is not itself an "action" so a NOD is not a Lis Pendis event since the notice mandates a cure along with a time to do so.

The steps are notice after 120 days in default.  Allotment for time to cure which varies slightly by state in the 20 to 30 day mark.  Then the loan must be accelerated.  This is important because other debt collection "clocks" start ticking, such as statues related to debt collection.  

Once accelerated the action starts upon filing.  The acceleration must occur in order to call for the action.  

So what you are seeing in Texas is the case in form in all other proceedings in various states.  Bear in mind the actual definition of foreclosure is the termination of the borrower's right or equity of redemption.  

A borrower need not be granted (or protected from) a right to redeem if the action does potentially create a loss of equity.

So to be clear a NOD is not a foreclosure action. It is simply a notice. The notice does not mandate or require a foreclosure action. Rather it is a step toward making the arugument that the mortgagee had to rely on legal remedies to enforce the terms of the loan.

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