Notice of Default in Fargo? Read This…
Did you get a notice of default in Fargo, ND?
What does it mean and what should you do? Is it real? How do you know? Are you going to be evicted? And, if so, how much time do you have? How does the pandemic affect all of this?
First off, don’t worry and don’t make any rash decisions.
In this article, we’ll answer all those questions and more. We’ll explain exactly what it means to go into default. This is just the beginning of the foreclosure process. We’ll review your options with you and give you a rough idea of how much time you have before you’re evicted.
What is a Notice of Default?
A notice of default is the first step in the foreclosure process. It means that the bank is beginning the legal process of taking back the house. They haven’t received mortgage payments in some time, so they’re pursuing other options. The notice officially means they’ve filed paperwork in your county clerk’s office to begin the lawsuit.
Most of the time, you can see this coming. If you received a notice of default, it means you stopped paying your mortgage and the bank attempted to contact you multiple times to collect those overdue payments. Most of the time, at least 3-6 months of payments build up before the bank starts to foreclose.
Could the Notice of Default Be Fake?
However, if you don’t make the mortgage payments (or, in the case of a deceased loved one, you weren’t in charge of making the payments until recently), you might not really know whether or not you have been making payments. Maybe you were under the impression that you were automatically paying them — and maybe you’re right.
Is it possible that the notice of default isn’t actually real? Yes, it is possible.
The Federal Trade Commission has very specific directions on what to do in order to validate the legitimacy of the notice. This includes: 1) asking for a validation notice, and 2) watching out for tell-tale signs of intimidation (such as the threat of jail time and other scare tactics).
How Much Time Do You Have Before You’re Evicted?
In order to get an idea of how much time you have before you’re legally forced to leave the premises, we’ll review the steps of the foreclosure process from your mortgage lender’s perspective.
- Borrower stopped making payments for a number of months, usually 3-6.
- They received a notice of default in the mail. We’ll give the tenant a reinstatement period, where they’re allowed to renegotiate the terms of the mortgage.
- If they take no action or make no payments, we will put the house up for public auction. First by sending a notice of trustee’s auction and then by holding the auction.
- If the house fails to sell at a public auction, we’ll hire a realtor to sell the house as an REO.
- We’ll evict the current tenants when we sell the house.
As you can see, if you just received a notice of default in the mail, you have at least 90 days before the bank tries to sell your home to anyone else. Keep in mind, too, that the bank is just running a business. They need to make sure that they have revenue, so they’re going to take whatever action is necessary to secure that income. You may have bought a poor, depreciating property with limited information. You may have bought at the peak of a hot market before losing your job. Now the housing market is down and so is your income.
This might be harsh to hear, but the bank largely doesn’t care. They’ve heard it time and time again, but it does open up a possible opportunity for you:
Option #1: Renegotiate Your Mortgage
Banks make most of their money by lending money to others. They don’t make a lot of money foreclosing on homes and then reselling them. If they can avoid all that extra paperwork, they will.
This means that, if you have any possibility of continuing to make mortgage payments, your first course of action should be calling your lender. You can discuss the possibility of either taking a short break in mortgage payments while you get back on your feet or reducing the monthly bill to something that’s more manageable for your current income level.
But what else can you do?
Option #2: Look for Buyers, or Try for a Short Sale
If you can prove that you’ve suffered financial hardship, you can ask your lender if they’ll let you sell it for less than the remaining amount on the mortgage.
Your credit will still take a hit, but it can be a much better option than letting the house be sold at public auction.
If you’re looking for buyers, we buy all sorts of properties in the Fargo, North Dakota area. We’ll be sure to give you a fair market offer on your property. If you’re interested, feel free to give us a call or send us an email.
Option #3: Don’t Do Anything
This is going to be, by far, your worst option. By not doing anything, you’re only delaying the inevitable and destroying your chances at negotiating with your lender in an amicable way.
The situation itself is awful. Your income might have taken a hit through no fault of your own, but your name is, unfortunately, on the mortgage. The mortgage is a binding contract between you and the lender. You’re going to have to deal with this one way or another, so continuing to ignore it is only going to make the problem worse.
What About the Pandemic? How Does It Affect Evictions?
Currently, the federal government has a ban on all evictions until March 31st, 2021. If you received a notice of trustee’s sale or even a notice of eviction, you’ll have until then before you’re formally evicted.
But you should aim to move out long before you’re physically forced to move out. Evictions can be a traumatic experience for you and your family members, so you should explore your options long before you end up with nowhere to go.
Conclusion: Notice of Default in Fargo? Read This First
This article reviewed exactly what a notice of default entails. It’s the first step in the foreclosure process. The bank is letting you know that it’s filed paperwork with the county clerk’s office and that, if nothing is done to address the delinquent mortgage payments, they’re going to move forward with foreclosure (and eventually eviction).
If you just received a notice of default, you have 90 days as a reinstatement period. The lenders want you to contact them to sort out your options before they’re forced to take more drastic measures, so that should be one of the first things you do.
Next, you could try to negotiate with your lender for a short sale. That’s when you sell your house for less than what’s left on the mortgage. The bank will typically agree to this as long as you meet certain criteria (and, of course, they can’t just make more money by sending the house to auction).
If you’re worried your house is too beat-up for most buyers, let us take a look. We buy all kinds of properties for a fair price, no matter how beat up they are.