How Does the Pre-Foreclosure & Short Sale Process Work?

Mortgage Close to Foreclosure

The current mortgage holder recognizes their inability to re-pay the loan and has defaulted. Before the house is foreclosed upon the seller places the house for sale to avoid foreclosure. The house can be advertised for sale by the individual or through a real estate agent.

Sale

Once the house has a potential buyer the house is sold for the price of the remaining mortgage and any missed payments. The buyer has the opportunity to see the house, complete inspections and ask the owner about the house.

Mortgage

The mortgage can be through the original mortgage holder or through another lending company. The mortgage will be the remaining balance on the loan and back payments to the original lender. These back payments typically have to be paid up front to clear the default on the original loan.