What is the Difference Between Pre-Foreclosure and Foreclosure?
The term “pre-foreclosure” generally applies to the period of moving through the legal process of default notices and mediations prior to the home actually being sold in a foreclosure auction. Under federal law, lenders must grant the homeowners 120 days after a payment is missed before officially beginning the foreclosure process, however the first step of the actual foreclosure process is the “Pre-foreclosure” phase. This phase lasts nearly the entire length of the foreclosure process, up until the home is sold.
After mortgage payments have gone unpaid for 120 days, lenders are within their rights to send the homeowner a Pre-Foreclosure Notice. This notice is the point in which a homeowner may go from simply being behind on payments to being confronted with foreclosure. The pre-foreclosure notice will clearly state the amount needed to become current on your mortgage, the date by which that amount is due, options for foreclosure mediation and alternatives, and will explicitly state that you are at risk of losing your home. Ignoring this notice will only progress the foreclosure process at which point the framework is being laid to repossess and auction your home.
The next step in pre-foreclosure is the lender issuing the Notice of Default. Rather than warning the homeowner of an impending foreclosure, this notice signifies the legal start of foreclosure procedure. From here out, the lender will follow a timeline set by Nevada foreclosure law issuing a series of additional notices informing the homeowner of the progression of the foreclosure proceedings.
It’s important to remember that throughout pre-foreclosure, the homeowner still has a right to reinstate their ownership by paying all outstanding balances and fees, up until 5 days prior to the scheduled auction of the home.
Though the foreclosure process begins 120 days after a missed mortgage payment, a home is not “foreclosed” until it’s repossessed by the mortgage lender in order to settle the balance of the defaulted mortgage. This point comes when the homeowner has exhausted all options in avoiding the foreclosure and instead forfeits their home to be repossessed.
While pre-foreclosure allows the homeowner many months or even years to become current on their mortgage, and stop the foreclosure process, the options available to homeowners become more and more limited the longer a homeowner waits. If you’re concerned about a possible or impending foreclosure, contact a foreclosure defense attorney as early in the process as possible. To discuss your options and the alternatives to foreclosure available to you, contact our office at (702) 998-1188, firstname.lastname@example.org, or schedule a consultation online.