Notice of Default
Definition - What does Notice of Default mean?
A notice of default is a document that is officially filed which lets the court and the borrower know that the borrower is behind on payments. A notice of default is a major warning sign for a borrower, and if the borrower does not catch up on his or her payments, then he or she can be foreclosed on.
Justipedia explains Notice of Default
In order to receive a notice of default, a person must be delinquent in payments. A person could be delinquent because they accidentally missed a few payments, because he or she lost his or her job, or for other reasons. However, loan repayments are enforceable by law. So, if a person stops making them, then his or her property can be seized as a result.
An example of a notice of default would be a bank sending a document to the court explaining that a particular borrower who is three months late in mortgage repayments is in a period of delinquency.
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