Real Estate Pro Articles

Dissecting Pre-Foreclosures

[Valid RSS feed]  Category Rss Feed -
By : Karim El Sheikh    99 or more times read
It is a sad fact that many people end up losing their homes to foreclosures each year. What is even a graver is the fact that some lenders are not always careful enough to check the ability if an individual to make repayments, while others really don’t care so much. And of course lets not forget the fact that people may find themselves in changing circumstances all of a sudden, which can lead to a decline in their meeting up with mortgage payments. However, whatever the reason for people being behind on their mortgage payments, the lender takes up a certain course of action from that point. Initially, the lender files a public default notice, which initiates the process of foreclosure, making the property enter the ‘pre-foreclosure’ stage officially.

What is Pre-Foreclosure?

Pre-foreclosure is basically a grace period, in which the property owner is warned of being in default and prompted to take some correcting action. At this point, the lender is not liable to claim the property back or sell it to recover his/her cost. The state laws determine how long the grace period is to last, so the length varies. In some cases the grace period can last as long as 6 months, however, most states offer shorter grace periods. There are a number of ways a property owner can avoid foreclosures, these include:

Paying Off Defaults – If the property owners can somehow pay off the default amounts, the property will then be removed from the pre-foreclosure. If the default was caused by some temporary hitch and if the payable amount was small, it would then be worthwhile to repay the debt off a personal loan. However, if the problem keeps coming up it over and over again, it may cause some more complications for the property owner. It is highly advisable that property owners avoid this problem of not being able to pay default amounts repeatedly.

Selling the Property – This is more of a drastic measure, but proves to be the best solution for owners if the problem of meeting repayments is likely to persist over and over again. By selling off the property, homeowners can get a reasonable amount of money back. But if the homeowner instead waits and allows the lender to sell it, the sale price surely going to be way lower than what is expected. This usually happens because lenders are always looking for the fastest means of offloading the property to get it off their hands.

Pre-foreclosures are often the best time for investors to approach property owners with fair offers to purchase the properties. However once put into pre-foreclosure, people tend to slip into a state of denial and avoid taking any action until it gets too late. Instead of being all negative about pre-foreclosures, if only people could be slightly more positive and make the best out of a difficult situation, things can actually turn out to be better. Another thing many people fail to understand is the detrimental effects of long-term foreclosure listings on their credit scores.

Yes, nobody wants their home landing in a state of foreclosure. But it will be a good thing if people can begin to realize the benefit of pre-foreclosures, as they give homeowners the opportunity of finding slightly more favorable solutions. It is definitely never a good idea to wait for the property to land into foreclosures and get seized by lenders. is the online resource for finding and buying foreclosures, preforeclosures, short sales, and more.

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles