Notice of default,
Definition of Notice of default:
The term notice of default refers to a public notice filed with a court that states that the borrower of a mortgage is in default on a loan. The lender may file a notice of default when a mortgagor falls behind on their mortgage payments. Information on notices of default normally includes the borrower and lender's name and address, the legal address of the property, the nature of the default, as well as other pertinent details. A notice of default is often considered the first step toward foreclosure.
A notice of default is a serious action taken by a lender. It notifies a borrower that their delinquent mortgage payments have breached the limit as outlined in their mortgage loan contract. Lenders outline the number of delinquent payments allowed in a mortgage contract before default action is taken. Most contracts generally allow up to 180 days of missed payments and delinquencies before any action is taken to file a notice of default.
A formal written notification a borrower receives once the borrower is in default, stating that legal action may be taken.
How to use Notice of default in a sentence?
- The notice must include details such as the borrower and lender's name and address, the property address, and the nature of the default.
- A notice of default is a public notice filed with a court that states that a mortgagor is in default.
- It is typically the final action lenders take before activating the lien and seizing the collateral for foreclosure. .
Meaning of Notice of default & Notice of default Definition