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Pre-Foreclosure Sale
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A Pre-Foreclosure sale is when you sell your home before foreclosure proceedings are brought against you. Sometimes this will be classified as a short sale by the lender, which is when they allow you to sell the home in a pre-foreclosure time frame for less than the amount you owe on your mortgage.A short sale can benefit all parties involved, since the foreclosure process is both costly and time-consuming.
The Preforeclosure Sale (PFS) Program allows the mortgagor in default to sell his/her home and use the net sale proceeds to satisfy the mortgage debt even though these proceeds are less than the amount owed.
Selling your property before the a foreclosure sale is a prudent idea. You can spare a foreclosure derogatory comment on your credit report.
You May Qualify for a Pre-Foreclosure sale if you are less than two months behind on your mortgage and if you believe you can sell your home within 3 to 5 months from the time the pre-foreclosure short sale is agreed upon by the lender or servicer. A new appraisal will be required for the lender to determine whether or not the new value meets necessary guidelines for pre-foreclosure sales.
Usually if there is enough equity in your home you can sale your home prior to the foreclosure sale date. This will save you from completely damaging your credit.