Letter of Intent Vs. Default Mortgage

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The weight of a mortgage gets heavier with delinquency.
The weight of a mortgage gets heavier with delinquency. (Image: Letras hipoteca1 image by Nuka from Fotolia.com)

A notice of default and letter of intent to foreclose are both part of the foreclosure process. The difference is the different times at which each document is issued in the process.

Letter of Intent to Foreclose

A letter of intent to foreclose (LIF) is a written notice listing all past due amounts owed on a mortgage and a deadline to pay those amounts. After the deadline has passed, the lender may start the foreclosure process.

What Triggers an LIF?

Although a borrower can be as little as 30 days late to receive a letter of intent to foreclose, most lenders or loan servicing companies will wait until 60 days have passed before issuing a LIF, according to foreclosure expert Karen Johnson.

The Next Step

If payment is not received by the lender after the deadline stated on the letter of intent to foreclose, the lender or loan servicing company may start the foreclosure process, which is the legal means in which a lender may sell a borrower’s property to pay the monies owed on the loan.

Notice of Default

The first step in the foreclosure process is a notice of default, a legal document recorded in the county where the property is located.

What the Notice of Default Covers

The Notice of Default states the estimated amount of monies needed to bring the loan current including foreclosure costs and attorney’s fees.

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