What is Notice of Default (NOD)?
A Notice of Default (NOD) is the formal first step in non-judicial foreclosure states — recorded by the lender when a borrower has missed payments for typically 90+ days. The NOD starts the public foreclosure clock and is one of the highest-quality off-market lead signals available to investors.
In non-judicial foreclosure states (California, Texas, Georgia, Nevada, and ~30 others), the foreclosure process happens outside court via a trustee. The NOD is recorded with the county, the borrower has a state-mandated reinstatement period (typically 90 days), then if not cured, a Notice of Trustee Sale is recorded and the auction is set typically 21+ days out.
Judicial states (Florida, New York, Illinois, and ~20 others) use lis pendens instead — same purpose, different mechanism, generally longer timelines.
NOD lists are pullable from county recorders directly (free, requires effort) or via aggregators (PropStream, BatchLeads, RealtyTrac). The list refreshes daily; freshness matters because owners who don't cure quickly become low-equity prospects, while those still early in the process have more options.
Concepts that connect.
A lis pendens (Latin for "suit pending") is a public legal notice filed with the county recorder warning that a lawsuit affecting the title to a specific property is in progress. For investors, the most common type is a foreclosure lis pendens — the first public signal that a property is heading to auction.
A pre-foreclosure property is one whose owner has fallen behind on mortgage payments and entered the formal foreclosure process, but has not yet been sold at auction. The window from initial filing to auction is typically 6-18 months depending on state — the prime window for investor outreach.
A short sale is the sale of a property for less than the amount owed on the mortgage, with the lender's approval to accept the shortfall and release the lien. Used when the borrower is in default and the property's market value has fallen below the loan balance.
A foreclosure auction is the public sale of a foreclosed property to the highest bidder, conducted by either a court-appointed officer (judicial states) or a trustee (non-judicial states). Properties typically sell for the loan payoff balance or below, with cash payment required same-day or next-day.
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