Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Notice of Default

A notice of default is a formal written notification that a borrower has violated the mortgage or deed of trust, typically by missing payments, starting a foreclosure timeline after any required cure period and giving the borrower a chance to reinstate the loan before the lender accelerates the debt or schedules a trustee sale.

Exam context

Notice of default starts foreclosure process after loan breach. Reinstatement pays arrears to stop sale. Acceleration demands full balance. Deed of trust states use trustee sale notices.

Foreclosure timeline

Servicers record notices according to state law and loan documents. Borrowers may cure by paying arrears, fees, and penalties within the statutory window. If uncured, the lender may record a notice of trustee sale or commence judicial foreclosure. Agents working with distressed sellers should verify deadlines with housing counselors and attorneys.

Short sales and alternatives

Owners in default may negotiate loan modification, forbearance, deed in lieu, or short sale before auction. Notice of default is public record, alerting buyers and investors. Licensees marketing pre-foreclosure lists must comply with state advertising rules and avoid equity stripping schemes.

Examples

  • Missed payment cure

    After three missed payments, the servicer mails a notice of default giving 90 days to reinstate by paying $8,400 in arrears plus fees, halting the scheduled trustee sale.

  • Public record alert

    An investor searches county records, sees a notice of default filed yesterday, and contacts the owner about a potential short sale before auction.

Keep studying

Practice notice of default questionsEnroll in pre-licensing

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