What is a Notice of Default?
A Notice of Default is the first stage of the pre-foreclosure process. Once the borrower stops making mortgage payments, the lender will send a written “Notice of Default,” which is the first indication of a default. The notice provides information about how much money is owed and how late the payment is. It also tells the borrower how to cure the default to bring the mortgage current and back in to good standing.
By this time, the borrower will start to get some credit dings for late mortgage payments. Its an indicator of distress and will cause the credit score to drop by 100 points or more.
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