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Your Options After Pre Foreclosure

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Your Options After Pre Foreclosure

Many people embark on the home buying journey thinking it’s a simple process. Unfortunately, that’s not always the case. It’s not everyone who finds a dream home. Then gets a loan, pays the house, moves in, starts repaying the mortgage, and lives happily ever after.

When a homeowner can’t make the mortgage payment for at least three months, their home enters pre-foreclosure. This is the legal situation of a property during its early stages of being repossessed. Good news is that all is not lost. You can prevent the long-lasting consequences of this stressful, embarrassing eventuality. Here are potential options that may help you avoid foreclosure.

Cure the Loan

There’s no single mortgage company willing to foreclose on your home. Just like there are consequences for you, the process of repossessing a home is expensive and time-consuming for them, too. They also understand that there’s a probable reason behind the late payment. For that reason, they want to work with you to resolve the situation.

To make this easy on you, it’s imperative that you communicate your difficulties as soon as you start missing payments. If you couldn’t make your payments because you were out of work for a short time, for instance, your lender may be willing to work out something. You must, however, express your willingness to start paying again and clear the outstanding balance.

Loan Modification

Asking your lender for a loan modification may be a good solution after pre-foreclosure. The federal mortgage associations like Freddie Mac and Fannie Mae have developed modification plans that help adjust your existing mortgage. This often includes adding any missed payments onto the balance and or extending the length of the loan.


Before a trustee sale or a public auction is arranged at the end of the pre-foreclosure period, you can refinance the home to cover the past due payment. This option allows you to stop the repossession by paying off the old loan in full, including the overdue balance, without using money out of pocket.

Sell the Home

Selling the home as a short sale or for the balance of the loan is another possible solution for foreclosures. In the event the lender agrees to sell the property for less than what is owed on the mortgage (short sale), they must forgive the remaining balance on your mortgage to satisfy your debt in full.

To make the most of this option, you need to start looking for a buyer as soon as you receive a Notice of Pre-Foreclosure Options from your lender. If you present them with a reasonable offer from a buyer, they must be happy to consider. Perhaps, this is because you’ll be saving them the trouble of finding a qualified buyer in a soft market.

File Bankruptcy

If you are not able to salvage the situation using any of the above options, the lender may eventually start repossessing your home. Luckily, declaring bankruptcy can help stop the foreclosure dead on its tracks. Although it doesn’t let you off the hook for your debts completely, it prohibits your mortgage lender and other debt collectors from continuing collection activities. During this time, you can work with your mortgage company to formulate a reasonable payment plan so you can get back on track.

Bartifay Law Offices Can Help

Whether you choose to cure the loan, sell the house or file bankruptcy, the process may be time-consuming and confusing, especially if you’re not well versed with legal matters. But don’t fret, that’s what we do best every day at Bartifay Law Offices. We can work with you to make sure you get ample time to fix your situation without having to move. Give us a call to learn how we can help.

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