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Foreclosure Property: From The Viewpoint Of The Investor, Homeowner, And The Lender

 Pre-foreclosure refers to the beginning of a legal proceeding that ends in the property being repossessed from a defaulting borrower.

A lender on the property files the proceedings because the borrowing owner has failed to pay under the contractual terms of payments. Notice is given to the borrowing owner regarding the legal notice being taken by the lender. 

In the last negotiations, the borrower has the opportunity to pay the default amount or negotiate the terms with the lender or by possibly selling the property on his own to receive the right amount.

From The Buyer's Point Of View:

Buying a house in pre-foreclosure means the bank is not yet involved in the legal processes. The homeowner might have himself not thought about putting his property on sale.

Various sites compile information about the houses going for public sale, even if the homeowner does not formally mention it.

The investors can approach the homeowners to make a deal beneficial for both parties. 

Those properties where the property's value is much more than what the homeowner owes are beneficial for the buyer. The buyer having knowledge in this context would offer an amount less than the market value and still help the owner get out of the property arrangement.

Beware, in the classic case of default in payment where the owner is already indebted might be a harsh time on his emotional crises. Thus, it makes it a delicate situation to step into when already a high pending legal notice from the bank has heightened the tension in the mansion.

From The Owners Or Sellers Point Of View:

Of Course, there are negative impacts of foreclosure that, as an owner, you will want to avoid. In uncertain times where economies are abrupt, default in payments can happen, one of the natural phases of loss of liquidity. So gaining as much as possible on the sale of the house must be a natural objective.

Try refinancing the loan to pay back the original lender and gain enough time before the property is mortgaged. 

If refinancing is not an option, then arranging a short sale can be an option. This requires permission from the lender stating that they are willing to accept a lesser amount as a reduced payment for the loan to prevent foreclosure. Quick sales might take months to break the deal finally. 

Selling a house to a home investor for cash is a vital option. The transactions take around a week or two to be processed. Selling the house to a home investor is better because the homeowner can pay off his debt without damaging the credit score.

The homeowner, in this case, would be entitled to any asset they have owned for a while. 

Thus it is better to sell the home before the auction or the pre-foreclosure notices begin to arrive. One can contact the professional home investor as soon as possible to gain rightful control over your possession and dignity. 

There Are 6 Phases Of Foreclosure:

Payment Default

When at least one default has occurred on a mortgage payment, typically, the payments are due on the 1st of the month, which can extend upto the 15th. After a missed payment notice, a demand letter is sent after the second default.

Notice Of Default

This is sent within 90 days of a payment default. Hence the loan will be given to the lender's foreclosure department in the same place where the property is located. 

Notice Of Sale

The lender publishes the notice in the local newspaper for three weeks, stating the property's availability in a public auction.

Trustee's Sale

The property placed for the bid will be handed over to the highest bidder. The opening bid is calculated on the value of the outstanding loan and liens, unpaid taxes, and costs associated with the sale. The new owner is entitled to immediate possession unless he decides any contrary. 

Real Estate Owned

In case of failure of the sale, the lender becomes the owner and attempts to sell the property through the REO asset manager.


The borrower can stay until the property is sold. Sufficient no. of days are provided to allow the occupants to remove any personal stuff and relocate.

Foreclosure is a tedious process and is best if avoided because of the cost and legal proceedings that take months to resolve. Thus, every decision must be planned before being enacted. 

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