Pre-Foreclosure

AAA

DEFINITION of 'Pre-Foreclosure'

The status of a property which is in the early stages of being repossessed due to the property owner's inability to pay an outstanding mortgage obligation. Reaching pre-foreclosure status begins when the lender files a default notice on the property, which informs the property owner that the lender will proceed with pursuing legal action if the debt is not taken care of. At this point, the property owner has the opportunity to pay off the outstanding debt or sell the property before it is foreclosed.

INVESTOPEDIA EXPLAINS 'Pre-Foreclosure'

Property owners who are in the pre-foreclosure stage may enter into a short sale in order to pay off outstanding debts. Because the property owner is looking to avoid being foreclosed upon, an interested party may be able to purchase the property for less than if he or she waited until the property went into foreclosure. After a property is foreclosed upon, the lender is more likely to try to sell the property at lower prices.

RELATED TERMS
  1. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  2. Delinquent Mortgage

    A mortgage for which the borrower has failed to make payments ...
  3. Real Estate Short Sale

    Any sale of real estate that generates proceeds that are less ...
  4. Involuntary Foreclosure

    When a borrower defaults on a home mortgage loan and the lender ...
  5. Foreclosure Buyout

    A refinancing program that allows a homeowner to avoid foreclosure ...
  6. Notice Of Default

    A public notice filed with a court stating that a mortgage borrower ...
Related Articles
  1. Foreclosure Opens Doors For Real Estate ...
    Home & Auto

    Foreclosure Opens Doors For Real Estate ...

  2. Purchasing A Short-Sale Property
    Home & Auto

    Purchasing A Short-Sale Property

  3. Short Sell Your Home To Avoid Foreclosure
    Options & Futures

    Short Sell Your Home To Avoid Foreclosure

  4. Mortgage Options For Underwater Homeowners
    Home & Auto

    Mortgage Options For Underwater Homeowners

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center