Court Filing

• The Notice of Default is filed with the clerk of court in the county or jurisdiction where the property is located. The notice allows the lender to pursue further legal action against the borrower, up to and including foreclosure and repossession of the property. Without a Notice of Default filed in accordance with state law, the lender cannot legally reclaim the property.
  
  

Notice to Borrower

• The Notice of Default must also be delivered by certified mail to the borrower. The certified mail with a return receipt proves in the eyes of the court that the borrower has been legally notified that the loan is in default and further legal action will be forthcoming if the delinquent loan is not brought current. The Notice may also be posted on the property itself, usually by attaching it to the front door.
  
  

Notice of Intent

• The lender may send a Notice of Intent to the borrower before filing a Notice of Default. Some state laws require that the Notice of Intent be delivered to the borrower at least 30 days before the Notice of Default. In addition, the lender furnishes copies of the Notice of Default to any party that has a security interest in the property, for example second mortgagors, home equity lenders or others.
  
  

Deadline

• In many states, including California, most lenders issue a Notice of Default after 90 days have lapsed since the last missed payment. After the notice is issued, the borrower is given a time limit for bringing the loan current, usually 90 days.
  
  

Foreclosure

• If the loan remains delinquent, the lender then has the right to file a foreclosure action in civil court. This involves the publication of a public notice, and the formal repossession of the home by the lender, unless the borrower can show good cause why the home should not be foreclosed upon, or makes satisfactory repayment arrangements.