What is a Pre-Foreclosure? What Homeowners Need to Know

What is a Pre-Foreclosure? What Homeowners Need to Know

When homeowners start falling behind on their mortgage payments, the term “pre-foreclosure” often comes up. But what does it really mean? If you're a homeowner in this situation, understanding your options can help you make the best decision before it’s too late.

What is Pre-Foreclosure?

Pre-foreclosure is the period before a home officially goes into foreclosure. It happens when a homeowner has missed several mortgage payments (typically 90+ days), and the lender has issued a Notice of Default (NOD) or Lis Pendens (depending on the state). This means the homeowner is at risk of losing their property, but foreclosure hasn’t officially happened yet.

What Happens During Pre-Foreclosure?

Once a home enters pre-foreclosure, homeowners generally have a few options:

✅ Catch Up on Payments – Some lenders allow reinstatement if the homeowner can pay past-due amounts.

✅ Negotiate with the Lender – Loan modifications or forbearance agreements may be possible.

✅ Sell the Home – Homeowners can sell before the foreclosure process begins to avoid credit damage.

✅ Pursue a Short Sale – If the home is worth less than the mortgage balance, the lender may approve a short sale.

✅ Do Nothing (Risk Foreclosure) – If no action is taken, the lender will move forward with foreclosure, which can have long-term consequences.

How Long Does Pre-Foreclosure Last?

The timeline varies based on the state, but pre-foreclosure can last anywhere from three to six months (or longer) before the lender proceeds with an official foreclosure. During this time, homeowners have a critical window to take action.

Why Selling During Pre-Foreclosure Can Be a Smart Move

Many homeowners believe foreclosure is inevitable once they miss payments, but that’s not true. Selling your home before foreclosure allows you to:

✔️ Avoid serious credit damage (a foreclosure stays on your record for 7 years!)

✔️ Have more control over the sale and negotiate better terms

✔️ Potentially walk away with money in your pocket instead of losing everything.

Final Thoughts

Pre-foreclosure isn’t the end—it’s an opportunity to take action. If you're behind on your mortgage and not sure what to do, let's talk. I specialize in helping homeowners navigate short sales and pre-foreclosures so they can make the best decision for their future.

📞 Call/Text Me: 469-855-0199 📧 Email: Dawn@ElevatedRealtyGroup.net