The pre-foreclosure process is the time period starting when your lender institutes foreclosure proceedings against you because you defaulted on your mortgage payments until your home is sold at a public foreclosure auction. You still own your home during the pre-foreclosure process, and can remain in your home during negotiations with your lender to stop the foreclosure process. You should speak to a foreclosure defense attorney immediately to find out what options you have to fight the foreclosure, and keep your home.
The entire foreclosure process normally takes about 3-5 months, but can take as long as a year. The government has put pressure on lenders to negotiate other alternatives with borrowers to stop or slow down the foreclosure process. Some states allow you to redeem your property after the foreclosure sale by paying all the costs and legal fees. It is important to check the laws of your state.
Legal Terminology
The terms pre-foreclosure, foreclosure and REO are used interchangeably so people get confused. A short sale and a deed in lieu of foreclosure are considered pre-foreclosure properties. A pre-foreclosure short sale is when you offer your home for sale for less than you owe your lender on your mortgage, subject to your lender’s approval. The deed in lieu of foreclosure occurs when you sign the deed back to your lender and return the keys to them. In both instances, you would end up walking away owing your lender nothing more on your mortgage, provided you and your lender agreed to this in writing. The lender will then stop the foreclosure proceedings against you.
A foreclosure property is one that has already been through a foreclosure proceeding and has been sold at a public foreclosure auction. A real estate owned (REO) property is a foreclosure property that did not sell at a public foreclosure auction, and has been taken back by your lender. REO property is generally listed with a Realtor and offered for sale similar to a resale property. The difference is the bank is the seller and owner instead of a private owner.
Hire a Foreclosure Defense Attorney
A foreclosure defense attorney can defend you in a foreclosure proceeding, and help you save your home from foreclosure. The attorney can help you decide which of the following foreclosure prevention options work best for you:
- Refinancing
- Reinstatement
- Mortgage modification
- Short sale
- Deed in lieu
- Filing bankruptcy
A foreclosure defense attorney is an expert in foreclosure laws, can answer your questions and advise you of your legal rights.
