What is a pre-foreclosure sale?

A pre-foreclosure sale is a type of transaction that takes place when a homeowner is unable to make payments on their residential real estate in California and is at risk of foreclosure. In a pre-foreclosure sale, the homeowner attempts to sell their property before it goes into foreclosure in order to avoid the financial consequences that come with the formal foreclosure process. The pre-foreclosure sale process begins when the homeowner is unable to pay their mortgage and enters into a legal agreement with their lender. The agreement allows the homeowner to sell their home and pay off the balance of their loan to the lender without going through the formal foreclosure process. The lender agrees to accept a lower amount from the homeowner, in exchange for getting their money back sooner. The homeowner then puts their home on the market in an effort to sell it as quickly as possible before it goes into foreclosure and receives a lower amount for the property. During the sale, the lender has to sign off on the agreement between buyer and seller and release the property title to the buyer. In the end, the homeowner can avoid the financial burden of foreclosure, while the lender can recoup some of their losses. While this option may seem favorable, the homeowner may still be responsible for any remaining balance on the loan. Pre-foreclosure sales are a way to help homeowners, who are at risk of foreclosure, avoid the long-term financial consequences that come with it.

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What is a pre-foreclosure sale?

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