Foreclosure in Bakersfield>Question Details

Amber Kissel…, Home Buyer in Bakersfield, CA

what is pre-foreclosure?

Asked by Amber Kisselburg, Bakersfield, CA Fri Aug 15, 2008

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Sometimes real estate terms can be SO simple that we tend to read into them too much rather than understand them at face value. But no question is a bad question, ever. So, to answer your question, pre-foreclosure is the timeframe prior to the actual foreclosure sale that occurs when the property is held for auction at the county court house (typically).

The home is either bid on by private individuals who hold a cashier's check for the bid amount or more with them (no loan terms, cash only) and the home is sold to the highest bidder.

More likely is that the home does not sell to a private individual due to the lack of equity in the property and the home is not "sold" but reverts to the trust deed holder, lender or banking institution that holds the trust deed secured by that home. At that point it becomes a "foreclosed" property or REO (real estate owned).

I hope that helps!
1 vote Thank Flag Link Fri Aug 15, 2008
Pre-Foreclosure can be many things, Short-Sales are Pre-Foreclosures.

Another example: if you ever fall behind by 2 mortgage payments or two months you will get a notice of intent to foreclose, this property can now be considered a Pre-Foreclosure.

Pre meaning anything before, in this case before foreclosure!

--
Victor Kaminski
Broker of Record
Marivic GMAC Real Estate
2056A Lincoln Hwy. (Rt.27)
Edison, NJ 08817-3330
Office: 732-650-9911 Ext.302
Cellular: 908-884-5757
Toll Free: 1-866-745-GMAC(4622) Ext.302
http://www.MarivicRealty.com
http://www.realrep.com/
(MIDDLESEX MLS SEARCH) http://search.victor.msx.mlxchange.com/
(GSMLS SEARCH) http://www.gsmls.com/
(Monmouth/Ocean MLS) http://monmouthoceanmls.com/victor
http://www.homes.com/Agent/4243382/victorkaminski
http://www.trulia.com/voices/profile/Real_Estate_Pro-Edison-…
http://www.city-data.com/forum/members/victorkaminski-211209.html
http://local.yahoo.com/info-41760781-marivic-gmac-real-estat…
http://www.realrep.com/Listing/DefaultListingSummary.aspx?Sh…
http://www.city-data.com/forum/3305497-post16.html
http://www.trulia.com/voices/Home_Buying/I_m_thinking_of_pur…
http://nls.point2.com/members/US/New-Jersey/Edison/Victor-Ka…
1 vote Thank Flag Link Fri Aug 15, 2008
Lenders (typically banks) may file a Notice of Default and start foreclosure process if the borrower (homeowner) is late in payments.

California law requires all lenders who will foreclose on a loan, to contact the borrower (homeowner) at least 30 days prior to filing a "Notice of Default" (NOD), this is often referred to as pre-foreclosure.

The lender cannot begin foreclosure until at least 30 days after contact with the borrower or 30 days following a diligent effort to contact the borrower. Diligence means mailing a notice which includes the lender’s information, followed by three phone calls on three different days at three different hours, followed by certified letter return receipt requested.

After the 30 day period, a NOD is filed, here's the timeline of events:

Day 1 - Notice of Default is filed with the county recorder.

Within 1 month -Mail Notice of Default

After 3 months - Set Trustee Sale date

25 days before Trustee Sale date - Send notice of sale to I.R.S.(when necessary)

14 days before Trustee Sale date - Record Notice of Trustee Sale

7 days before sale date - If court action, 7day rule may apply

5 business days before sale date - Expiration of borrower's right to re-instate the loan


Sale date - Property is sold to highest third party bidder or "reverts" back to the lender/bank and it becomes their "real estate owned" (REO).

There are often variations in the above timeline of events, depending on the situation, however, this is typically how things proceed. Strongly suggest speaking with the lender to seek a loan modification or an attorney to help you throughout the process.
0 votes Thank Flag Link Sat Sep 1, 2012
Can an offer be made on a pre-foreclosure home
0 votes Thank Flag Link Sat Sep 1, 2012
Yes, an offer can be written on a pre-foreclosure home. There are some nuances in these situations, such as if it's a short sale - if the lender will pay for repairs, and various other factors. But basically, an offer can be made and accepted. Recommend working with a Realtor to protect yourself from potential issues. Hope it helps.
Flag Sat Sep 1, 2012
Hey Amber,

I think your question has been answered about what pre-foreclosure is, however is pre-foreclosure something you are dealing with or know someone in a the prediciment?? If so and you have any question feel free to give me a call

Janelle Sandifer 661.703.6835
0 votes Thank Flag Link Thu Sep 4, 2008
Hello Amber, When the Home owner is behind in his /her mortgage payments (1, 2, or 3 ) the lender sends out to the home Owner a "Notice of Default" meaning that the lender has started the legal procedure to foreclose on the property because of the owner's failling to fulfill his/her financial obligation; the lender could start this legal process after the 16 day since the last payment was made; however now days because the Banks are backed up in foreclosures, they are sending the "Notice of Default" about 90 days since the las payment was made, then the process has a 90 Day publication period on wich at the end of it the Lender will send a "Notice of Trust Deed Sale", 21 days after that the sale takes place in the footsteps of the City hall to the highest bidder, and the home owner losses the home and bears now a foreclosure mark in his credit and probably a deficiency judgement to collect on the mortgages entirity.
Now if you have seen a for sale sign on front of a house with a rider that mentions "Pre-foreclosure", that means that the Real Estate Agent is listing a Home for sale as "Short Sale" or "Short Pay" and that it is in the 90 day publication period or before, may be the Home owner is behind only 1 or 2 payments and has not recieved the "Notice of Default" but wants to save his credit and doesn't want a foreclosure mark on his credit report, so the home Owner and the Listing agent are trying to sell the home during the foreclosure period. If the Owner has an offer on the Home during this period and the lender would accept the offer as discounted value and the sale closes in this period, the seller has saved his credit rating; of course there are some other ramifications to this option (short sale) but it can be explained in detail, depending of the different circumstances of each individual case. I Hope this help you.
Web Reference: http://www.davidfuentes.net
0 votes Thank Flag Link Wed Aug 20, 2008
Geeze... Let's see How many times the same thing can be said with a little spin to it.

Getting comical, is't it?

It's a very simple question with a very simple answer...

If you ever fall behind by 2 mortgage payments or two months you will get a notice of intent to foreclose, this property can now be considered a Pre-Foreclosure because this is the first step of the foreclosure process, notifying the borrower with an intent to foreclose, at least in my neck of the woods (New Jersey).

Pre meaning anything before, in this case before foreclosure!
Not to say that everyone behind 2 or more payments on their mortgage always foreclose, that is not the case at all.

Another note short sales are one of many types of pre-foreclosure sales.

--
Victor Kaminski
Broker of Record
Marivic GMAC Real Estate
2056A Lincoln Hwy. (Rt.27)
Edison, NJ 08817-3330
Office: 732-650-9911 Ext.302
Cellular: 908-884-5757
Toll Free: 1-866-745-GMAC(4622) Ext.302
http://www.MarivicRealty.com
http://www.realrep.com/
(MIDDLESEX MLS SEARCH) http://search.victor.msx.mlxchange.com/
(GSMLS SEARCH) http://www.gsmls.com/
(Monmouth/Ocean MLS) http://monmouthoceanmls.com/victor
http://www.homes.com/Agent/4243382/victorkaminski
http://www.trulia.com/voices/profile/Real_Estate_Pro-Edison-…
http://www.city-data.com/forum/members/victorkaminski-211209.html
http://local.yahoo.com/info-41760781-marivic-gmac-real-estat…
http://www.realrep.com/Listing/DefaultListingSummary.aspx?Sh…
http://www.city-data.com/forum/3305497-post16.html
http://www.trulia.com/voices/Home_Buying/I_m_thinking_of_pur…
http://nls.point2.com/members/US/New-Jersey/Edison/Victor-Ka…
0 votes Thank Flag Link Sat Aug 16, 2008
Amber:

Some great answers below, however, also some that could be a little confusing.

1. Pre-foreclosure (PF) DOES NOT equal short - sale (SS). That being said many PFs are also SS.
2. PF = the entire time a property is in default under one or more mortgages (default meaning payments have not been made as agreed, mortgage being used loosely here, since in California we actually have Notes secured by Deed of Trust, not mortgages).
3. SS = the loan on the property is greater than the value of the property when the homeowner needs to sell.
4. Many PF properties are never sold. If the owner has equity or just experienced a temporary problem which caused them to fall behind in their payments, they can bring the loan current and stop the foreclosure.
5. The foreclosure process is 3 months and 3 weeks (rule of thumb 111 days). Up until 5 days before the auction date, the lender MUST allow the homeowner to reinstate their loan by paying all past due amounts. The last 5 days is at the lenders option. During this entire period the property is considered PF.

If you have more specific questions, please feel free to contact me directly. I have specialized in pre-foreclosure and distressed properties for many years.

Hope this helps your understanding and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Sat Aug 16, 2008
oops...I put my website by mistake....the site you want is below
0 votes Thank Flag Link Fri Aug 15, 2008
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
It's also known as a short sale. The site below has a lot of great infromation for buyers and sellers of this type of property...check it out!
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Fri Aug 15, 2008
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
As the name implies it is the period of time prior to the lien holder filing a notice of default (foreclosure.) Foreclosures times vary by state. During this preforeclosure time, a lis pendens is filed. The up side of a preforeclosure for the buyer is that they can approach the property owner or the plaintiff's (bank) attorney before the property goes to auction.
0 votes Thank Flag Link Fri Aug 15, 2008
This usally refers to the period of time between the filing of the Notice of default and the actual date of the trustee's sale. Not all properties in pre-foreclosure end up forclosed.
0 votes Thank Flag Link Fri Aug 15, 2008
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