Notice of Default vs. Notice of Intent to Accelerate vs. Notice of Sale in DC, Maryland and Virginia

Your mortgage servicer has sent three letters in three months, and each one sounds worse than the last. One says you are in default, one says the lender intends to accelerate, and the newest one has a date and a time on it.

These notices mark three different stages of a foreclosure, and each one closes off some of your options. Here is what each notice means, who sends it, how much time it gives you in DC, Maryland and Virginia, and what to do the day it arrives.

What is a notice of default?

A notice of default is a letter telling you that you are behind on the loan. It is the earliest warning, and it usually comes from your servicer, the company that collects your payment.

Federal mortgage servicing rules require the servicer to try to reach you by phone by the 36th day you are behind and to send a written notice by the 45th day. That written notice encourages you to call, describes any loss mitigation options, meaning alternatives to foreclosure such as a modification, and points you to HUD-approved housing counselors.

DC has its own formal version. Before a trustee’s sale in DC, the lender has to send a notice of default on a residential mortgage that includes a mediation election form and a loss mitigation application. That notice starts a 30-day clock to ask for mediation, so it matters far more than an ordinary late notice.

What is a notice of intent to accelerate?

Acceleration means the lender demands the entire loan balance at once, not just the missed payments. A notice of intent to accelerate is the warning that the lender is about to do that.

This notice usually comes from your loan documents, not from a statute. Standard deed of trust language requires the lender to tell you what the default is, what you must do to cure it, and a date at least 30 days away by which you must cure, and to warn you that failing to cure may lead to acceleration and a sale.

In my experience it often arrives in the same letter as the notice of default, sometimes called a breach letter or demand letter. Read your own deed of trust, because the required wording and timing come from that document.

What is a notice of sale?

A notice of sale tells you the date, time and place of the foreclosure auction. By the time it arrives, the lender has finished the earlier steps and is ready to sell.

Who sends it, and how far ahead, depends on where the house is. In Maryland and Virginia, the law also requires a newspaper advertisement of the sale.

How do the notices compare in DC, Maryland and Virginia?

How much time does each notice give me?

DC. You have 30 days after the notice of default is mailed to return the mediation election form to the Mediation Administrator at the DC Department of Insurance, Securities and Banking. Later, the notice of intention to foreclose, DC’s version of a notice of sale, is mailed to you, with a copy to the Mayor at least 30 days before the sale.

Here is how to stop a foreclosure sale in DC.

Maryland. The Notice of Intent to Foreclose has to be sent at least 45 days before the lender files in circuit court, and the case cannot be filed until 90 days after the default if that comes later. The sale is advertised in a newspaper once a week for three weeks in a row, and the state court system says you should get notice of it at least 10 days ahead.

Here is the full Maryland foreclosure process.

Virginia. For a home you live in, the trustee’s notice of sale has to be sent at least 60 days before the sale, by personal delivery or by certified or registered mail. For a rental or other property, the minimum is 14 days.

Here is what you can still do after a Virginia notice of sale.

What should I do when I get a notice of default?

Open it the day it comes and check the numbers against your own records. Servicer accounting mistakes happen, especially after a loan is transferred.

Call the servicer, ask what loss mitigation options the loan allows, and ask for a written reinstatement figure, the amount to bring the loan current, good through a specific date. If you are in DC, send back the mediation election form within the 30 days.

This is the best time to apply for help. Federal rules generally bar the servicer from starting foreclosure until you are more than 120 days behind, and a complete application sent before foreclosure starts generally keeps it from starting until the review and any appeal are over.

What should I do when I get a notice of intent to accelerate?

Find the cure date. If you can pay the amount listed by that date, pay it by a method you can prove, and keep the receipt.

If you think the amount is wrong, say so in writing and keep a copy. If you cannot pay, send a complete loss mitigation application now, because the next notice may come with a sale date.

What should I do when I get a notice of sale?

Count the days to the sale. Under federal servicing rules, a complete loss mitigation application received more than 37 days before the sale generally stops the servicer from holding it while the application is reviewed, but one that comes in later may not.

A bankruptcy petition filed before the sale stops it the moment the case is filed. If you want to keep the house, Chapter 13 can stop the sale and catch up the arrears over three to five years.

In Maryland, also check whether your mediation deadline has passed. In DC, check whether a mediation certificate was issued before the notice went out.

What should I do right now?

If you have any of these notices for a house in DC, Maryland or Northern Virginia, call me at (202) 448-5136. Have every notice you have received, in the order they came, and your latest mortgage statement.

The consultation is free. I will tell you which stage you are in, how much time you have and which option fits. If you already have a lawyer in a filed case, call that lawyer first.

Don’t wait. Each notice leaves you fewer options than the one before it.