Pre-foreclosures are usually considered to be properties where a Notice of Default has been filed in a Deed of Trust state, or a mortgage related Lis-Pendens has been filed in a Mortgage state. The owner has already defaulted on their mortgage payments but actual foreclosure hasn't happened yet. When a property enters pre-foreclosure, the owner usually has at least 2-3 months to reinstate the property by paying off the amount in default. If you're interested in the property, contact the owner as soon as possible.
Properties that are in pre-foreclosure can offer benefits to the buyer, seller and lender. The seller is able to get rid of their unaffordable property without suffering credit damage from a foreclosure. A buyer may be able to obtain the property for below market price. The lender will benefit when the loan is acquired by a more financially stable buyer.
Visit our Education Center to get more information about buyind a pre-foreclosure home in your area.