A borrower receives a "notice of default" when he falls behind on his mortgage payment, according to U.S. Legal. Parties with an interest in the property, such as a cosigner, have the right to request a copy of the notice of default.
Function
For a party to receive a request for notice of default, he must give his address to the originator of the loan, according to the TD Service Company Foreclosure Dictionary.
Benefits
A request for notice of default is important because it allows the interested parties, such as other lenders and the home owner's association, forewarning that their stake in the loan is at risk.
Effects
When the interested parties receive a notice of default, it means the borrower must immediately remit payment and other costs, such as filing fees, or the prime lender may take legal action, usually a foreclosure.
