What Is Pre-Foreclosure?

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What Is Pre-Foreclosure?

Pre-foreclosure is a property status in which the property owner is informed that the property may soon be repossessed. This usually happens on account of the homeowner defaulting on their mortgage. As such, it is typically the bank or mortgage lending institution that initiates the pre-foreclosure stage.

Preforeclosure formally begins when the mortgage lender files a “default notice” for the property. This informs the homeowner that legal action and foreclosure may follow if the debt is not paid or addressed.

Can We Still Avoid Foreclosure at This Stage?

Yes- in fact, one of the main purposes of pre-foreclosure is to provide the homeowner with a chance to make some changes so that they can avoid foreclosure proceedings. Here, the homeowner can often take steps to avoid foreclosure, such as:

Thus, pre-foreclosure is sometimes seen as a “grace period” in which the debts can be settled so that the owner can keep title to the property. If this is not possible, foreclosure or other legal actions may result.

What If Legal Disputes Arise during Pre-Foreclosure?

Legal disputes can sometimes arise during the pre-foreclosure stage. For instance, it the pre-foreclosure process may uncover more debt such as tax debt or other issues. Or, pre-foreclosure can sometimes reveal defects with title and other similar issues. In such cases, these legal issues will need to be dealt with before the property can be foreclosed upon or sold. This may require additional legal actions, which can sometimes change the outcome of the foreclosure process.

Do I Need a Lawyer for Help with Pre-Foreclosure issues?

Pre-foreclosure is an important issue when it comes to legal status of property. You may wish to hire a lawyer if you need help with any real estate matters. Your attorney can provide legal advice which can clarify your rights in the situation. Also, if you need to file a legal claim, your lawyer can be on hand to represent you during the proceedings.

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Last Modified: 08-04-2015 02:45 PM PDT

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