Pre Foreclosure or Foreclosure: There is a Difference
The public keeps hearing about the foreclosure problem the our country is facing but, they also hear that they are great investment opportunities. Have you heard the same?
What people haven't been hearing about is the difference between a "Pre Foreclosure" and a "Foreclosure." I will cover "how to find pre foreclosures" in a separate post.
The media simply has people confused about foreclosures. Thankfully, it is really very simple. Let's take a look at each one.
Pre Foreclosure
A "pre foreclosure" means that a property is delinquent and the lender has either filed to foreclose or they are about to file to foreclose. The homeowner still legally owns the property and are the owner of record.
When a lender forecloses on a property, what they are actually doing is legally repossessing the title. A borrower is allowed to be the legal owner for tax purposes but, if they fail to make the payments, the lender will foreclose to gain legal ownership of the property
When you hear about the "good deals," they generally are referring to pre foreclosures.
Foreclosure
Since Pre Foreclosures are owned by the homeowner or borrower, a Foreclosure is owned by the lender who has legally foreclosed on a property and are now on title.
Once the lender becomes the legal owner, the property becomes what is known as an R.E.O. property. It stands for: Real Estate Owned.
If a mortgage was secured by VA or FHA, the foreclosing lender actually sells the property immediately after the auction to VA or FHA. The property is then turned over to HUD and those become what are known as "HUD Houses."
Most of the advertising on the Internet for foreclosure lists, are actually properties that have already been foreclosed on and are bank owned REO's.
Among the products offered by Foreclosure Listing Service is the Pre Foreclosure list. It lists the name of the borrower, property address, loan dates, lender, trustee, legal address and more.
For more information on how you can obtain a pre foreclosure list, click the following link and I hope this post has helped clarify any public confusion.
-George Roddy Sr.
President, Foreclosure Listing Service
Addison, Texas
