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What happens once I receive a Notice of Default from a trustee?

• If the beneficiary of your loan is not exempt from the mediation program, you may be referred to
mediation under the Foreclosure Fairness Act, but only an attorney or housing counselor may make
the request to the Department of Commerce.
• Act quickly and contact a housing counselor or qualified attorney to discuss your options and get a
referral to mediation to discuss whether or not mediation would be a good fit for your situation.
• Begin gathering documents that would be required for mediation in the chance that you are referred
to mediation.
• If you have not done so, begin setting aside money in at least the amount of what you would need to
pay on a modified loan payment in case you are approved for a loan modification or need to use that
money to move.

What happens after the Notice of Trustee’s Sale is filed and recorded?

• You will only have 20 more days to be referred to mediation. If you are not referred to mediation prior to
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the 20 day after the Notice of Trustee’s Sale is issued, it may be difficult to get your servicer to agree to
mediation voluntarily.
• It is now completely up to you to contact your servicer directly or through a housing counseling agency or a
qualified attorney as soon as possible.
• If you miss the mediation deadline or the beneficiary of your loan is exempt for the mediation process, you
can still apply for workout options.
• Unless you act quickly, your house will be sold at auction on the date in the notice.

NOTE: The details of the process may vary depending on your mortgage servicer.

The trustee sends a “Notice of Trustee’s Sale,” setting a sale date
no sooner than 120 days after the notice is recorded with the
county records office. The trustee must send a copy of this
notice by certified mail within 5 days after recording. No further
notice is required. However, in addition to mailing the Notice of
Trustee’s Sale, the trustee must post the Notice of Trustee’s Sale
on the home (this could be right after the Notice of Trustee’s
Sale is recorded). The trustee must also publish the Notice of
Trustee’s Sale in a newspaper at two different times, once no
later than 4 weeks before the sale and again no later than a week
before the sale.

Do I still owe my mortgage if my house is sold at auction?

After a non-judicial foreclosure, the foreclosing beneficiary cannot pursue the former homeowner for the
difference between the loan balance and the value of the property (known as deficiency). In other words,
even if the house sells at foreclosure for less than the beneficiary is owed, the balance of the debt is forgiven.
However, if there are two deeds of trust on a house, and the first deed of trust is foreclosed, the borrower’s
liability on the loan secured by the second deed of trust is not extinguished. The beneficiary of the second
loan may pursue the borrower for the debt.

January 2020 | Page 13