Defininig Foreclosure, Preforeclosure, and Short Sale

With so many homeowners in the US facing foreclosure I wanted to shed some light on what a foreclosure, preforeclosure, and short sale are. In order to make an educated decision on how to move on with your life you need to be informed about what these are and the timeline that's involved so you don't make the mistake of waiting until the last minute to take action.

Pre-Foreclosure: This is the time period during the foreclosure process when the home has not gone to sale or auction. After receiving an NOD (Notice of Default) the homeowner will have approximately 90 days before getting the NTS (Notice of Sale) which informs the homeowner of the date, time, and location of the auction date.

Foreclosure: In the event that the home does not sell to the highest bidder during the auction the home will be taken back by the bank.

Short Sale: A short sale is when the bank accepts to take less than what is owed to them by the homeowner. Negotiating with the banks to take less than what is owed can be a complex process and not all sellers or homes will qualify for a short sale. The banks will run the numbers and if they see that they can make more money going through the foreclosure process, they will deny the short sale.

Notice of Default (NOD): Given to the homeowner after they've been more than 60 days late on their mortgage.

Notice of Sale (NTS): Given to homeowner 90 days after the NOD announcing the sale date, time, and location.

                                     Timeline for CA Foreclosure

60 days Late: Bank will issue an NOD to the homeowner.

90 Days After NOD has been filed: Homeowner will get the NTS that will state date, location, and time of the home auction date.

5 days before the sale date: Borrower loses his right to bring the loan current and keep his home.

Sale Date: Auction is held to sell the home to the highest bidder.

If property is not sold at auction: Home is foreclosed and gets taken back by the bank.

It's imperative that you understand that you have up until 5 days before the auction date to bring your loan current and keep your home. Same is true for short sales. If you are trying to do a short sale AFTER this 5 day period it is very unlikely that the banks will allow it. We've done it before, but it's tough. Time is of the essence. If you or anyone you know is facing foreclosure visit Hope For Seller. This site will connect you with people who can purchase your short sale home and walk you through the process of selling your home.

If your looking for more information on stopping foreclosure in CA I also suggest visiting HUD's website on how to avoid foreclosure in CA.