Home Buying in Sebastopol>Question Details

Jjj, Home Buyer in Sebastopol, CA

what does a pre-foreclosure mean exactly?

Asked by Jjj, Sebastopol, CA Wed May 26, 2010

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In California, foreclosure in general is a process, first a home owner defaults by not paying the mortgage, after minimal 3 months the bank can file a Notice of Default which needs to be recorded at the recorder's office. After the Notice of Default has been it takes minimally 3 months before the bank can file a Notice of Trustee sale which also needs to filed at the recorder's office. This is public information. The trustee sale is minimal 3 weeks after the Notice of trustee sale has been filed.
In our market these time frames are longer. Many homeowners might try to sell the house before it finally 'goes back to the bank' in general this is a short sale. Usually the statement that a house is in pre foreclosure means that it is a short sale.

1 vote Thank Flag Link Wed May 26, 2010
A pre-foreclosure home is any home the home owner has defaulted on their mortgage. After a home owner has missed three consecutive mortgage payments the bank starts the foreclosure process. There are many steps that have to be taken for the bank to foreclosure on a property and each state the process varies. Until the foreclosure sale is executed the home is in a pre-foreclosure status.
0 votes Thank Flag Link Fri Aug 21, 2015
Great question :

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0 votes Thank Flag Link Wed May 26, 2010
Hello Jjj,

In simple terms, it means its in the process of foreclosure. It has not been foreclosed upon yet and the owner still may be able to retain title by paying off the debt but pre-foreclosure means just that it's not foreclosed upon yet :)

Kamal Randhawa
0 votes Thank Flag Link Wed May 26, 2010
Pre-foreclosure is the period between the first filing with the court after default and the actual foreclosure itself when the property is auctioned at the courthouse
Web Reference: http://sellmypbchomes.com
0 votes Thank Flag Link Wed May 26, 2010
Hi Jjj,

A "pre-foreclosure" is:

1) A period prior to an actual foreclosure where a homeowner has a certain amount of time to either pay the default or sell the property.

2) A term used to define the status of a property ("Short Sale" may also be used) where the defaulting borrower is attempting to sell the property which allows a defaulting borrower to satisfy the loan commitment (typically, at less than is owed) to avoid an actual foreclosure.

Typically, the non-judicial (i.e. Trustee) foreclosure process takes about 3 months, 3 weeks and 3 days (starting with the Notice of Default and ending with the Trustee sale/auction on the County Courthouse steps). However, currently, lenders are taking more time than this to complete a foreclosure due to the volume they are facing.

If nobody buys the home during the Trustee sale/auction (including the lender themselves) the home becomes the lender’s property. Lenders who end up with properties contract with local Realtors to list the property on the MLS (a small percentage also forward the property to an auction company for liquidation). Until a home is actually foreclosed it is considered a pre-foreclosure. This is due to the fact the owner may cure the default, secure a loan modification, or close on a Short Sale.

Best, Steve
0 votes Thank Flag Link Wed May 26, 2010
When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, you can usually contact the homeowner and buy it through what is known as a short sale before the lender proceeds and the property goes into default .Should you need any further help with this matter feel free to contact me at my Santa Rosa office 1-877-870-2676 or you can go on my website as I have videos and facts and figures in regards to everything Real Estate.Jeffrey Martino Young at Essex Mortgage Bank in Santa Rosa,Ca, http://www.fhasubmissions.com
0 votes Thank Flag Link Wed May 26, 2010
Pre foreclosure simply means that the property owner is in default on their mortgage(s). Does not necessarily mean that they will be foreclosed upon but that they are in the priliminary steps to having that happen should they not come current on their obligations. As some of the other answers have stated sometimes owners in this situation will try to sell their property thru a short sale i.e. selling it short of what they owe and other times they will not do so nor bring their mortgage current and end up being foreclosed upon or doing a Deed In Lieu of Foreclosure.

Just because they are showing as pre forclosure does not mean that they for sure will be foreclosed upon.

Hope this helps.
0 votes Thank Flag Link Wed May 26, 2010
It's a procedure in which a lender allows a mortgagor to avoid foreclosure by selling the property for less than outstanding balance of the loan. A lender waits for the mortgagor to be 3 months delinquent before starting the pre-foreclosure.
0 votes Thank Flag Link Wed May 26, 2010
Hello Jjj,
Usually the Seller has stopped making their payments & are trying to do a short sale to prevent the foreclosure.
0 votes Thank Flag Link Wed May 26, 2010
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