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Foreclosure Articles

What Does Pre-Foreclosure Mean?

ByJoshua Denbeaux April 3, 2025April 3, 2025

If you’re facing foreclosure on your home, it’s understandable that you might have questions about parts of the foreclosure process. It can be confusing and overwhelming for people unfamiliar with the foreclosure process.

There are a lot of steps in the foreclosure process. It’s important to understand what each step means and what action or response may be required from you by your lender or the courts.

Working with an experienced attorney can be very beneficial when going through a foreclosure to help you navigate the process. A foreclosure attorney can help you explore your options to avoid foreclosure and keep your home. 

Joshua Denbeaux is a New Jersey foreclosure attorney dedicated to fighting for the rights of homeowners. Contact us today to learn more about how we may be able to help you through foreclosure.

What Is a Pre-Foreclosure House?

A pre-foreclosure home is a step before a house is foreclosed on. Pre-foreclosure is an action taken by a lender to try to obtain money owed on a mortgage. Being in pre-foreclosure is when your lender notifies you that foreclosure may occur on your property.

When you’re in pre-foreclosure, you still own your home and have the chance to catch up on missed payments and save your mortgage. Pre-foreclosure is in effect before the notice of sale, sale of a property, or eviction occurs.

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 Between Pre-Foreclosure and Foreclosure

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.

When Does Pre-Foreclosure Start?

Once you receive a notice of default from your lender, pre-foreclosure starts. A notice of default is when your lender informs you that you’re behind on your mortgage payments, and is the first legal step towards foreclosure.

Before the foreclosure process legally starts, your lender will send a notice of intent to foreclose. A lender needs court approval in order to send an NOI. Once you receive an NOI, the pre-foreclosure process starts.

Understanding Pre-Foreclosure

Lenders are usually more willing to negotiate late payments, loan modifications, forbearances, or deeds-in-lieu of foreclosure during the pre-foreclosure period. Negotiating with your lender during this period of time can help you avoid having to pay extensive foreclosure proceeding costs.

Typically, when you are behind on mortgage payments, a lender requires you to pay the entire amount that you owe at once in order to become current on your loan. Your lender may be willing to negotiate a payment plan with you so you can catch up on your past-due payments without paying in one lump sum.

A loan modification is an agreement between you and your lender to change the terms of your mortgage to make it more affordable for you. It’s common for loan modifications to reduce your interest rate, extend your loan term, or a partial deferment of the loan principle.

A mortgage forbearance is an agreement between you and your lender where you agree to pause your mortgage payments for a period of time. With a forbearance agreement, you will have to pay back the fees that were paused during the forbearance.

A deed in lieu of foreclosure is when a homeowner voluntarily gives their lender the deed of their home to avoid foreclosure. With a deed in lieu of foreclosure, you will still have your home but won’t have to go through the foreclosure process.

Short sales can also take place during the pre-foreclosure time period. In a short sale, a homeowner will sell their home with lender approval in an attempt to avoid foreclosure. Short-sale homes are usually sold for less than the market value of the property in order to pay off the mortgage and avoid foreclosure.

If your home is in pre-foreclosure, it’s your last chance to stop your house from being foreclosed on. Lenders are often willing to negotiate with homeowners to avoid foreclosure. It’s important to stay in contact with your lender to explore alternative options to avoid foreclosure.

Contact a Foreclosure Attorney

Going through foreclosure can be a stressful time for homeowners. It’s important to be prepared for the foreclosure process so you can understand what’s happening.

A foreclosure attorney can help answer any foreclosure questions you may have and help you through the foreclosure process. There are a lot of ways to avoid foreclosure. An attorney can help advise you on the best option for your specific situation.

Joshua Denbeaux

Attorney

Joshua Denbeaux is a Partner at Denbeaux & Denbeaux, concentrating his practice on financial consumer rights issues and foreclosure defense. He has substantial experience in legal matters related to foreclosure, loan modification, debt collection, and the prosecution of cases related to predatory lending. Mr. Denbeaux received his law degree in 1994 from Seton Hall University after completing his undergraduate work at The College of Wooster. Mr. Denbeaux is licensed to practice in the United States District Courts for New Jersey.

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