What are the differences between foreclosure and pre-foreclosure?

Foreclosure and pre-foreclosure are two financial processes that involve a homeowner and their mortgage lender. Both processes involve a homeowner struggling financially and defaulting on their mortgage payments. Foreclosure is a process in which a lender takes back a lien on a home from a homeowner who has defaulted on their mortgage payments. A lender will typically direct a foreclosure attorney to take legal action in order to repossess the home. In California, this will typically result in a foreclosure auction being held in which the highest bidder will become the new owner of the home. Pre-foreclosure is a process in which a lender attempts to work out a payment plan with the homeowner before repossessing the home. This process gives the homeowner the chance to make up their mortgage payments and keep the home. In California, pre-foreclosure is initiated when the lender files a Notice of Default, which is a public document that informs other potential buyers that the homeowner is defaulting on the mortgage. The homeowner will then have a certain amount of time to make their payments and avoid foreclosure. The main difference between foreclosure and pre-foreclosure is that in foreclosure a lender has already taken legal action and the homeowner has lost their right to the home, while in pre-foreclosure the lender is still trying to work with the homeowner and the homeowner still has the right to the home. Both processes can be a difficult situation for the homeowner, and seeking the advice of a financial expert is recommended before making any decisions.

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What are the differences between foreclosure and pre-foreclosure?

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