Term Tuesday: NOD

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A notice of default, or NOD, is a legal document filed by a lien holder when a homeowner has defaulted on a home loan (stopped making the payments). The homeowner will have a predetermined amount of time to become current with payments or face foreclosure.

Once the NOD is registered the homeowner has three months to catch up on the late payments and fees. Immediately following the three month grace period, a notice of trustee sale is sent which informs the homeowner the date on which house is to be sold at auction.

If a homeowner is unable to bring the mortgage current, they can attempt a short sale or relinquish the property to the lien holder.