The Jimmy Rex Team

A property appears on the notice of default once a homeowner is delinquent on their home for two straight months. At that time, the bank that has the note on the property records a “Notice of Default” with the County Recorder’s Office. That is when the title company collects the information and distributes it to us.

The properties that appear on the list are not necessarily for sale. The “Notice of Default” is the first step a lender must take in the foreclosure process. The homeowner has several options. First, they can catch back up on their payments and bring their account with the bank in good standing. Second, they can wait for foreclosure. 90 days after the “Notice of Default” has been posted the bank can foreclose. A homeowner then has all that time to explore an option to sale, a short sale (where the bank agrees to sell the home for less than the mortgage on the home), a Deed in Lieu of Foreclosure (this is essentially a voluntary repossession where the homeowner abandons the home and the bank takes it over), or wait out the 90 days and then get kicked out of their home by the Sheriff. This is why the Notice of Default list is a very valuable asset.

The people that show up on this list may be looking for someone to come in and create a win-win situation. The homeowner wins because if he gets out of the home and pays off the lender, his nightmare goes away and he may escape with some of the equity of the home (all equity would be lost if the bank repossessed the home). The person buying the home gets to help someone in a tough position and can usually negotiate a purchase price below market value in return for a quick close.