What is "pre-foreclosure"?

Once you become more than 30 days late on your mortgage note, you are in default, and the lender holding that note can begin the legal steps necessary to foreclose. The foreclosure process can be lengthy and expensive, so most lenders will attempt to work out a solution to a delinquency first, which may mean modifying the terms of the note, or allowing the owner a certain amount of time to get caught up, etc.,but once a note gets to be more than 90 days past due most lenders will start the foreclosure process.

The term "pre-foreclosure" is usually used to describe a piece of property that has a   mortgage note delinquent more than 60 days who's owner has no foreseeable way to bring the note current or meet the terms of any proposal from the lender. When foreclosure seems imminent, many property owners will look for ways to sell the property quickly to attempt to preserve any equity they may have remaining, and to avoid the damage a foreclosure will do to their credit scores.

 back