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Loan in good standing: Payments are being made on time. |
| Day 1 |
Missed Payment: It's the first of the month, and the mortgage payment is due. The borrower misses a payment. |
| Day 31 |
Second Missed Payment: It’s the first of the month, and the borrower misses a second payment. |
| Day 32 |
Default: The borrower is in default the second day after the second missed mortgage payment is due. |
| Day 40-90 |
Notice of Default (NOD): Some time in the next 60 days, the borrower will receive a letter stating that the Notice of Default (NOD) has been recorded. The date of the NOD depends on the lender. |
| Day 130-180 |
Silent Period: After the NOD is recorded there is a 90 day silent period in which borrower may pay all back payments and fees to cure the default. After the silent period, the lender sends the borrower a letter setting the date of the Trustee’s Sale, typically three weeks after the end of the silent period. |
| 5 days before Trustee's sale |
Right to Cure: The borrower may cure the default up to five days before the property is sold. |
| Day 150-200 |
Trustee’s Sale: The house is sold at a foreclosure sale or auction. |
| Day 180-230 |
Eviction: The borrower has the right to remain in the house for up to 30 days after the house is sold. |
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| Refinancing: Before a payment is missed, borrowers may refinance their home to reduce their mortgage payments, if they are unable to meet the terms of their loan. Refinancing is also an option after default. |
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| Early Delinquency Counseling: Early intervention is the most effective, because the borrower has more options for reinstating the loan. Counseling organizations can help the borrower work with the lender to create a repayment plan, loan modification, or forbearance plan. |
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| Counseling after Default: Even after default, counseling agencies can help borrowers reinstate their loan by working with the borrower and lender. |
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| Loan Reinstatement: The easiest method of avoiding foreclosure is to pay all overdue mortgage payments, as well as fees, and bring the loan back into good standing. This is not usually financially feasible, without an emergency loan or other source of additional income. |
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