What is Pre-Foreclosure?Posted in Pre-Foreclosures, by support
Pre foreclosure may be defined as the grace period which is offered to the homeowner to rectify the problem. But even after taking care of every aspect sometimes the property steps into foreclosure. There are a number of ways introduced through which it is possible for the homeowner to avoid it from being foreclosed or even sold by the lender.
Pre foreclosure is a distressing fact even though many of the Americans lose their houses due to foreclosure each year. For the different steps to pass over for foreclosure, the lender has to file a default public notice initially. This is the step involved in starting the process of pre-foreclosure. Due to filing, the property automatically enters into the pre-foreclosure stage.
Pre foreclosure is different from foreclosures as it can be referred to as the grace period. During this time, the homeowner is warned about the fault and time is provided for him to rectify it as soon as possible. But a loop-hole is that, at this time the lender is also not allowed to sell the property to meet the needs. The duration of the grace period differs with each state. Mostly 6 months is the grace period allotted and in many of the states even shorter time interval is given.
There are several methods which could be employed to prevent the property from being foreclosed by the lender. One of which is to pay off the default. If the homeowner manages to pay the default amount, then the property would be released from pre-foreclosure. If the amount is very small and could be easily paid back within few months, then it is advised that the home owner takes a personal loan to repay it as it could create more problems if it is not solved.
Another solution would be to sell the house. But this decision would really be painful and needs a special courage to do so. This choice would be the best one to choose if it is still an ongoing problem. For this decision to work out well, the home owner should sell the property for a reasonable price by himself. Whereas if the lender sells it, then he would surely sell it for lower amounts as he just needs to offload the property as soon as possible.
Pre-foreclosure is followed by foreclosure, so it is always recommended to settle the problem as soon as possible before the pre-foreclosure period ends. The pre-foreclosure period is very advantageous to the homeowner as it gives much time for him to rectify the problem soon.