A Notice of Default is scary, but it's not a foreclosure. California law gives you a 90-day window to reinstate your loan, apply for a modification, or challenge servicer violations. Here's exactly what to do.
A Notice of Default is the first formal step in California's non-judicial foreclosure process. It's a recorded document that tells you—and the world—that your lender claims you've fallen behind on your mortgage payments.
Under California Civil Code § 2924, the servicer must record the NOD with the county recorder and mail you a copy. The NOD starts a 90-day clock during which you can reinstate your loan by paying the arrears.
Many homeowners freeze when they receive a Notice of Default. That's the worst thing you can do. You have powerful rights under California's Homeowner Bill of Rights—but only if you act quickly.
California's Homeowner Bill of Rights requires servicers to contact you and explore alternatives before recording a Notice of Default. If they didn't, the NOD may be invalid.
Under CC § 2923.55, before recording an NOD, the servicer must:
Review your call logs and mail. Did they actually try to contact you 30+ days before the NOD? If not, you have grounds to challenge the foreclosure under HBOR.
You have 90 days from the NOD recording date to take action. Here are your four main options:
Pay all past-due amounts plus fees and costs. The servicer must accept reinstatement during the 90-day period.
Submit a complete loan modification application. This freezes foreclosure while they review.
If they violated HBOR pre-NOD requirements or are dual-tracking, demand they rescind the NOD.
Use the 90 days to sell your home or refinance with another lender to pay off the loan.
Understanding the timeline is essential. Missing a deadline can cost you your home.
The Notice of Default is filed with the county recorder. Your 90-day reinstatement period begins.
Under CC § 2943, request exact payoff amount. Servicer has 4 business days to respond.
Get your complete application in early. This triggers dual-tracking protections under CC § 2923.6.
After this, servicer can record Notice of Trustee's Sale. You lose the unconditional right to reinstate.
Trustee sale can occur at least 21 days after Notice of Sale is recorded and 90 days after NOD.
Send this letter immediately after receiving your Notice of Default. It asserts your rights and puts the servicer on notice of their obligations.
Yes. The NOD starts the foreclosure process, but you have many ways to stop it:
The key is acting immediately. The longer you wait, the fewer options you have.
Dual tracking is when a servicer continues foreclosure proceedings while simultaneously reviewing your loan modification application. California banned this practice under CC § 2923.6.
If you submit a complete loan modification application, the servicer cannot:
If they violate this, you can sue for actual damages plus up to $50,000 in statutory damages per CC § 2924.12.
Review your records for the 30 days before the NOD recording date:
Under CC § 2923.55, they must make these contacts at least 30 days before recording. If they skipped this, you have grounds to challenge the entire foreclosure.
Reinstatement is just one option. If you can't afford to pay the full past-due amount:
I can help you evaluate which option makes the most sense for your situation. The worst choice is doing nothing.
Bankruptcy creates an "automatic stay" that immediately halts foreclosure. But it has serious downsides:
Bankruptcy should be a last resort, not a first move. Explore HBOR challenges and loan modification first. If those fail, then consider bankruptcy with proper legal advice.
Force them to provide an accurate payoff quote within 4 days.
Getting bounced between reps? That's a violation worth money damages.
Propose a payment plan they must consider before proceeding.
Complete application guide to freeze foreclosure during review.
I handle California foreclosure defense from NOD response through sale postponement. HBOR violations, loan modifications, emergency TROs—technical work done right.