Notice of Default. At this point, also known as pre-foreclosure, the borrower has missed their third mortgage payment. Pre-foreclosure starts when your lender files a Notice of Default (NOD) at the county office governing your property. Unfortunately for the home owner, technically speaking the foreclosure process begins at this time; only a short 2 months after your first delinquent payment. It takes less than 2 weeks to receive your formal Notice of Default. In California, a 90 day period, known as the Reinstatement Period, is initiated as the time frame the borrower has to resolve the owed balance before a Notice of Sale.

Midpoint. At this time, typically 60 days before the Auction date of the home or property, the borrower's options for initiating a loan modification get very difficult. Contract terms vary from lender to lender, but the trend is the longer you put off making payments, the less likely your lender will allow you to create an agreement to modify your mortgage loan terms. However, if the borrower does manage to get caught up in payments, the NOD would then be withdrawn.