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Here is the online definition:
Pre–foreclosure: A property with late mortgage payments and the lender has issued a Notice of Default (in nonjudicial foreclosure) or a lis pendens (in judicial foreclosure) to the borrower. The borrower can still make payments and pay the loan amount due to stop a foreclosure.
Is it the best use of your time to track Pre-foreclosures?
Here is an actual example of the recorded status of a home going through a pre-foreclosure. Keep in mind, this home has been vacant and left for dead for years.
This example is pretty typical of what I experience.
In this example, the notice of trustee sale was sent to the homeowners
on February 6th, 2015, then released in October. You can see this goes on for about 5 years.
Why is it released? There are a number of reasons:
- The owner might have paid in full
- Owner filed bankruptcy
- Bank decided it’s not a good time to foreclose (too much inventory, bad time of year, etc).
- There is a kink in the chain of title
- and more….
The reason I say “is it the best use of your time”
When a property finally does get auctioned… it’s usually on Friday’s at the courthouse steps. It could get called on or it could not. The auctioneer will typically start at the amount due and go up from there. Bidders are buying sight unseen. The owners, tenants or others could be in the house at the time. There is no inspection of the property and there could be Title, City or county issues. Did I mention it’s a CASH ONLY transaction that must be paid at the time of the winning bid? that’s right!
Why are some bank foreclosures listed online (in MLS)?
The minimum bid might have not been met or another bank purchased the debt. It then becomes an REO (or owned by the Lender) property.
I hope my personal experience on this topic was able to help you!
Blue Summit Realty