What are the differences between foreclosure and pre-foreclosure?

Foreclosure and pre-foreclosure are two different stages in the process of reclaiming a mortgaged property that is not being paid for by the borrower. The difference between them is mainly in the timeline and how soon the borrower is at risk of being evicted. Foreclosure is the last stage of the process where the lender initiates the legal process to take possession of the mortgaged property. This is when the borrower has defaulted on the loan, and the lender is seeking to get the property back. During foreclosure, the lender may include an eviction order or a sheriff’s sale of the property. In Washington, state law requires that the lender provide the borrower with a Notice of Default, a notice of foreclosure and a right to cure under certain conditions. On the other hand, pre-foreclosure is before the official foreclosure process begins. During pre-foreclosure, the borrower is behind on their payments and the lender is able to pursue other options to recover the debt. For instance, the lender may opt to allow the borrower to make up for missed payments or negotiate for a settlement amount. Additionally, the borrower may still be able to sell the property to a third-party to avoid foreclosure. Additionally, the Washington Department of Financial Institutions provides a Foreclosure Mediation Program to offer an alternative to foreclosure proceedings. As a result of these differences, pre-foreclosure offers more options for both the borrower and the lender to resolve the situation without having to take the property away from the borrower. Foreclosure is the more serious of the two stages and can lead to the borrower losing the property.

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What are the differences between foreclosure and pre-foreclosure?

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