Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Collection law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
Lenders almost uniformly send a Notice of Right to Cure upon any default by their borrowers. Although I’m cognizant as to why you do it—because you really just want to get paid, not commence collection—it’s not always necessary.
To determine whether the notice is necessary, the first place you should look is the customer’s loan documents. Does the note say that the loan can’t be accelerated until a notice of default has been sent?
Does the mortgage require the notice be sent? Look at this particular debtor’s loan documents to ensure compliance with the contractual agreement.
A notice of right to cure default is required, prior to acceleration, if the loan is regulated by the Wisconsin Consumer Act.
In an earlier video, I discussed those loans. But, if the loan fits within the WCA’s definition, that loan cannot be accelerated until the notice has been sent and the cure period has expired.
I’ve found that these rules are not specifically delineated in the form note language. For example, the form loan documents say something to the effect of, “no notice is required, unless the law requires”.
This requires that the lender be cognizant of the rules – in particular, assessing whether the loan falls under the WCA – and assess each loan before acceleration.