Knowing the differences between foreclosure and pre-foreclosure is extremely important if you find yourself involved in the foreclosure process.
If you’re struggling to make your mortgage payments or are already in pre-foreclosure or foreclosure, it’s important that you understand your options. There are options available for homeowners to work with their lenders to avoid foreclosure.
When your home is at stake, you should work proactively. A foreclosure attorney can help you explore your options to avoid foreclosure and stay in your home.
Contact Joshua Denbeaux today to learn more about your options to avoid foreclosure and how we may be able to help you.
What Is Pre-Foreclosure?
Pre-foreclosure is the stage before a home officially enters foreclosure, and it typically begins when a homeowner falls behind on mortgage payments.
When a homeowner is behind on mortgage payments, a lender issues a notice of default, formally notifying them that they’ve missed payments. Receiving a notice of default starts the pre-foreclosure process.
While in the pre-foreclosure process, homeowners still have opportunities to resolve their situation. You can make up missed payments or negotiate with your lender to avoid foreclosure.
Lenders view pre-foreclosure as a warning phase. When your home is in pre-foreclosure, you still have a chance to rectify your default and reinstate your loan.
What Is Foreclosure?
When a home is in foreclosure, it is transferred into the lender’s possession. Foreclosure is the legal process initiated by your lender to repossess a home due to a borrower’s continued failure to make mortgage payments.
A lender who repossesses a home through foreclosure usually tries to sell it. Selling a foreclosed home allows lenders to recover some of the money owed on the mortgage.
Differences
Both pre-foreclosure and foreclosure are signs of financial distress. Pre-foreclosure offers an opportunity for potential resolution, while foreclosure leads to the final enforcement action.
Pre-foreclosure offers advantages and opportunities. While in pre-foreclosure, you still have the opportunity to save your property and stay in your home. This doesn’t mean that you don’t have options once you’re in foreclosure, but the process is much easier in pre-foreclosure.
Negotiating with your lender to avoid foreclosure can also help you preserve your credit score from the negative impact of foreclosure. Pre-foreclosure is a time when you can work with your lender to explore loan modifications, short sales, or other options to avoid foreclosure.
During pre-foreclosure, lenders may be more open to negotiating with borrowers to find mutually beneficial solutions to prevent a home from being foreclosed on.
Steps When Facing Foreclosure or Pre-Foreclosure
If you’re in pre-foreclosure or think you may be headed there, there are some things you can do to help avoid foreclosure.
The first thing you should do when facing foreclosure is to review the terms of your mortgage. It’s important to make sure that you understand your mortgage agreement and any associated documentation. A foreclosure attorney can work with you to review the documentation and help make sure that you understand what everything means and how it can impact you.
You should contact your lender. Your lender may be able to provide you with options or solutions to help you avoid foreclosure.
Working with an attorney during the pre-foreclosure and foreclosure process is a good idea. An experienced and reputable foreclosure attorney can help you navigate through the foreclosure process.
The pre-foreclosure and foreclosure process is a great time to start exploring your alternative options to foreclosure. Your lender may offer you options for loan modifications, refinancing, or short sales. The best option for you depends on what your lender offers and what fits your financial situation and needs.
Contact a Foreclosure Attorney Today.
Being in financial distress and having mortgage issues can be very stressful. Understanding what you’re dealing with and your options to avoid foreclosure is important.
An experienced foreclosure attorney can help you through the pre-foreclosure process and work with your lender to avoid foreclosure.
Contact Joshua Denebaux today to learn more about how we may be able to help you avoid foreclosure.
