RealtyTrac logo
For SaleForeclosurePre-ForeclosuresBank OwnedAuctionsRecently SoldGuides & StrategiesKnowledge BaseGlossaryCalculatorsMarket Info
Foreclosure processPre-foreclosure

Notice of Default

Also called NOD

In short

A notice of default (NOD) is a public notice, recorded with the county, stating that a borrower has fallen behind on a mortgage or deed of trust and that the lender may move toward foreclosure.

Who files it
The lender, servicer or trustee
Where it's recorded
County recorder's office
Most common in
Non-judicial (deed of trust) states
What it signals
Start of pre-foreclosure

Where it fits in a foreclosure

Notice of Default belongs to the pre-foreclosure stage.

  1. 1Missed paymentsThe owner falls behind; the servicer sends notices and may offer workout options.
  2. 2Pre-foreclosureA notice of default or lis pendens is filed. The owner can still sell, catch up or negotiate.You are here
  3. 3AuctionThe property goes to a public sale, usually for cash, as-is and often without an inspection.
  4. 4Bank-owned (REO)If no one outbids the lender, it takes the property back, clears most title issues and lists it.
  5. 5ResaleA buyer or investor purchases, repairs and occupies, rents or resells the home.

What a notice of default contains

A notice of default typically identifies the borrower, the property, the loan and the amount needed to cure the default. It is recorded in the county land records and sent to the borrower. Recording it makes the default public, which is why it is a common source of pre-foreclosure leads.

Where it is used

The NOD is most closely associated with non-judicial foreclosure in states where loans are secured by a deed of trust. In judicial foreclosure states, the comparable first public step is usually a court filing and a recorded lis pendens. The name, content and timing of the notice vary by state.

What happens next

After an NOD is recorded, state law sets a minimum waiting period before the property can be scheduled for sale. During that window the owner can usually cure the default through reinstatement, negotiate with the lender or sell. If not, the trustee records a notice of trustee sale with the auction date.

Example

Reading an NOD

An NOD recorded on March 3 shows the owner is $14,600 behind, including missed payments, late charges and fees, on a loan with a balance of about $320,000. A buyer researching the property now knows the owner is in pre-foreclosure, roughly what it would take to cure the default, and that a trustee sale cannot be scheduled until the state's waiting period has passed.

Notice of Default vs. Lis Pendens

Notice of Default

A notice of default (NOD) is a public notice, recorded with the county, stating that a borrower has fallen behind on a mortgage or deed of trust and that the lender may move toward foreclosure.

Lis Pendens

A lis pendens is a recorded notice that a lawsuit has been filed involving title to or an interest in a property, such as a judicial foreclosure. It warns buyers that the outcome could affect ownership.

The differenceA notice of default starts a non-judicial foreclosure outside of court. A lis pendens is a notice that a lawsuit affecting the property, such as a judicial foreclosure, has been filed.

Frequently Asked Questions

Related terms

Pre-ForeclosureForeclosure processPre-foreclosure is the period after a lender files a default notice or foreclosure lawsuit but before the property is sold at auction. The owner still holds title and can sell or catch up.Notice of Trustee SaleForeclosure processA notice of trustee sale is the public notice, in a non-judicial foreclosure, that sets the date, time and place a trustee will auction a property to repay the defaulted loan.Non-Judicial ForeclosureForeclosure processA non-judicial foreclosure is a foreclosure carried out without a lawsuit. A trustee sells the property at auction under the power-of-sale clause in the deed of trust or mortgage.ReinstatementForeclosure processReinstatement is bringing a defaulted mortgage current by paying all past-due payments, late fees and foreclosure costs in one lump sum, which stops the foreclosure and restores the original loan.ForeclosureForeclosure processForeclosure is the legal process a lender uses to take back and sell a property after the borrower stops making mortgage payments, so the lender can recover what it is owed.Deed of TrustTitle & legalA deed of trust is a security instrument used instead of a mortgage in many states. The borrower gives a neutral trustee legal title as security for the loan until it is paid off.Loan ModificationForeclosure processA loan modification is a permanent change to a mortgage's terms, such as a lower rate, longer term or added past-due amounts, that a lender agrees to so a struggling borrower can afford payments.ForbearanceForeclosure processForbearance is a temporary agreement in which a mortgage servicer lets a borrower pause or reduce payments during a hardship. The skipped amounts must be repaid or resolved later.

Learn more in the knowledge base

What Is a Pre-Foreclosure? How the Stage Works for BuyersGuide · 7 min readPre-foreclosure is the window between a lender starting foreclosure and the home being sold at auction. The owner still holds title and still has options, so any purchase is a negotiation with the owner rather than a bid or a bank sale. This guide explains how the stage starts, how it ends and how it compares with auctions and bank-owned homes.How to Buy a Pre-Foreclosure Home: A Step-by-Step GuideGuide · 6 min readBuying a pre-foreclosure means negotiating with an owner who is behind on the mortgage, before the lender sells the home at auction. The deal can close as a normal equity sale or as a short sale that needs the lender's approval. This guide walks through each step, from research to a clean closing through escrow.How to Find and Screen Pre-Foreclosure PropertiesGuide · 6 min readPre-foreclosure leads come from public filings, so anyone can find them. The real work is narrowing a long list to the few properties worth your time. This guide covers where the filings are recorded, how to use a listing service, and how to screen each lead for equity, timeline and occupancy before you contact anyone.
Ready to look at real pre-foreclosures?
Browse pre-foreclosures across the country on RealtyTrac, with property details, estimated values and foreclosure status.
Search pre-foreclosures
ABCDEFHJLMNOPQRSTZ

Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.