I got a Notice of Default. Is it too late?

A Notice of Default is one of the most stressful pieces of mail a homeowner can receive. Many people assume it means the house is already gone. It does not. The key is understanding the timeline and acting early.

What a Notice of Default means

A Notice of Default (NOD) is recorded by the trustee when a homeowner has fallen behind on a mortgage secured by a deed of trust. It puts you on notice that the lender intends to sell the property if the default is not resolved. Both Nevada and California primarily use nonjudicial foreclosure, which means the process follows deadlines set by state law rather than a court calendar.

The Nevada timeline

• 35 days to cure. After the NOD is recorded and mailed, the homeowner has 35 days to make good the past-due amount before the lender can move forward.
• 30 days to request mediation. For owner-occupied homes, you have 30 days after service of the notice to petition the district court to take part in the state's Foreclosure Mediation Program. This window is short.
• At least 3 months. At least 3 months must pass after the NOD is recorded before the trustee can give notice of sale.
• Notice of sale. The Notice of Sale must then be posted for 20 days and published once a week for 3 consecutive weeks before the sale.

The California timeline

• At least three months. At least three months must pass after the NOD is recorded before a Notice of Trustee Sale can be given.
• Earliest sale date. The sale date can be no earlier than three months and 20 days after the NOD was recorded.
• Reinstatement. In most cases, a homeowner can reinstate the loan by paying the past-due amount, fees and costs until five business days before the scheduled sale date.

Where a short sale fits

If catching up on payments or a loan modification is not realistic, and you owe more than the home is worth, a short sale may be worth considering. In a short sale, the lender agrees to accept less than the full loan balance so the home can be sold on the open market.

A short sale requires lender approval and a complete document package, and approval is not guaranteed. Many homeowners prefer it to foreclosure because it lets them take an active role in how the sale happens. Starting early gives you the best chance of completing the process before a sale date.

Get professional advice

Every situation is different. For questions about deficiency, taxes or credit, talk with a real estate attorney, tax professional or HUD-approved housing counselor. Our role is to help you understand your selling options and work through the short sale process with your lender.

This article is general information, not legal or financial advice. Foreclosure laws and timelines can change. Consult a licensed attorney about your specific situation. Sources: NRS 107.080, NRS 107.086, California Civil Code 2924 and 2924c.