The first stage of the foreclosure process is called pre-foreclosure. After homeowners miss several months of payments the lender will issue a note of default. Pre-foreclosure is the time between when the note of default is issued and when the property being sold at auction. If the defaulted payments are not made during the allotted pre-foreclosure time, the property will go into foreclosure. During pre-foreclosure, borrowers and lenders can work together to try to design a new payment plan. Lenders want to avoid the foreclosure process as it is both lengthy and expensive. Additionally, lenders would rather work with the homeowners than seize the property as they prefer cash over real estate.
It is important for homeowners to understand that during the pre-foreclosure time period, the lending institution cannot take legal actions to evict the homeowners from the property. Rather, it is the time period in which public notice is given of foreclosure. This time period allows homeowners to attempt to sell or refinance their property.
The steps that fall under pre-foreclosure include:
If the homeowner and the bank cannot come to an agreement before the pre-foreclosure period ends, the bank can now start the process to repossess the home.
If you have any questions regarding Pre-foreclosure please contact Kara Homes & Associates. Our team can provide you with personalized real estate advice.