What is Pre-Foreclosure?
Pre-foreclosure is the period after a homeowner has defaulted and received a Notice of Default but before the property is actually sold at auction. During this window the owner can still save the home by catching up on payments, selling, or negotiating with the lender. Many short sales happen in pre-foreclosure.
Example: A homeowner three payments behind receives a Notice of Default. In the months that follow — the pre-foreclosure stage — they list the home as a short sale to avoid losing it at auction.