What Does Pre-Foreclosure Mean?

Your home is about to be foreclosed on. It is inevitable. Still, even after the Notice of Default has been served, there is a grace period called pre-foreclosure. During this time, you may still be able to help yourself in several ways.

Function of a Pre-Foreclosure Sale

People who buy pre-foreclosures may approach the borrower or home owner and buy the property outright, thereby usually getting the home at a discounted value.

Considerations to the Borrower/Owner

Even though the home may be worth more than the offer to buy, the owner may sell it for enough to pay off his mortgage and possibly receive some of his equity, avoiding a total loss. This situation would allow the owner to avoid foreclosure, preventing a bad mark on his credit.

Potential for Avoiding Foreclosure in Other Ways

Also during pre-foreclosure, the owner may avoid full foreclosure in other ways. He may reinstate the loan by paying the portion that is in default. He may also sell the property at public auction during the pre-foreclosure period.

Significance of Pre-Foreclosure

The borrower/owner must realize that even though the intent to foreclose has been served, during this pre-foreclosure period, the property is still his, and he may do with it as he wants.

Warning

Be aware of your rights. Don't give up without investigating all ways feasible to save your credit rating and your money. Use the pre-foreclosure period to your benefit.