Notice of Default

If you fall behind in the payments on your mortgage, the lender will usually send you a "notice of default" or "notice of delinquency" telling you that your payments are behind. A notice of default is often required by the mortgage. However, Delaware law does not require notice of default unless the mortgage requires such notice.

The notice of default warns you of a serious problem, so you must take action immediately. It may be possible to avoid foreclosure at this stage if you immediately call the Workout Department of your lender and offer to pay the full amount of back payments and current payments, or discuss some other type of workout agreement.

Notice of Acceleration

Many mortgages contain a paragraph that covers situations when you are in default or late on your payments. This paragraph is known as an "acceleration" clause because it allows the lender to accelerate, or push forward, the date that full payment on your mortgage is due. Some mortgage contracts require the lender to give "notice of acceleration" to the borrower.

The "notice of acceleration," sometimes called a "demand letter," normally states that the whole balance is due and payable immediately. If you fail to pay the entire amount due, the lender has the right to foreclose on the mortgage. However, the lender must comply with the requirements of the loan documents and other relevant laws. So, it is important to seek advice from an attorney as soon as you receive a "notice of acceleration."

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