What is a Notice of Default/Acceleration?
Most mortgages contain an acceleration clause which, upon your missing of a payment, allows your bank to require that you either pay off the entire balance of your mortgage or be foreclosed upon.
The notice of default/intent to accelerate is a warning that the bank will require you to pay off the entire balance of your mortgage if you don’t cure the default in a certain amount of time. Most notices are required to include four pieces of information:
- the default (typically that a payment was missed);
- the action required to cure the default (typically paying all missed payments and late fees);
- a date by which the default must be cured (typically at least 30 days after the notice); and
- the action the bank will take if the default is not cured (typically accelerating the debt and foreclosing on your home.
How Can I Avoid Acceleration and Foreclosure?
You can avoid acceleration and foreclosure by reinstating your loan. To reinstate your loan, you must pay the bank for all your missed payments and late fees. Unfortunately, this is not a realistic option for most homeowners. If you defaulted on your mortgage due to some hardship such as divorce, loss of income, injury or illness it is unlikely that you will be able to come up with the funds to cover all the missed payments and late fees.
Prepare to Defend Against the Foreclosure
Does this mean you should be resigned to losing your home? No. Put simply a notice of default/intent to accelerate is the bank’s warning to you that they are preparing to foreclose on your property. Accordingly, you should prepare to defend against the foreclosure. Our attorneys can help you get out in front of the foreclosure. We will look for violations the bank has made that will allow you to go on the offensive in federal court. We will also look for every available defense to the foreclosure action and help you to sort through you’re your available options to avoid foreclosure such as: obtaining a loan modification, cash for keys, deed in lieu, or short sale. If you just received a notice of default/intent to accelerate call us today for your free evaluation.