preforeclosures

What does it mean specifically when it says a house here is in preforeclosure?  And how would I get info on that specific house?  My client has asked me about a couple she found here and I'm not sure how to proceed.
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August 15 2013 - Denver
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Answers (5)

Some people mean "pre foreclosure" as being late, but no notice of default (called "NED" in Colorado).  Some mean the default notice is filed, but the auction has not yet happened (more likely the latter on Zillow).

In this process, you are buying FROM THE OWNER, not the lender.  It may be listed by a broker, but you are still dealing with the owner.  At the auction, you are buying from the trustee.  After sale, if nobody bid but the lender, then it is bank-owned or "REO".  In that case, you are buying from the bank, who is the owner.  Forget trying to go to the lender to buy it direct, because they will take their sweet time and eventually list it for sale on the MLS with a broker.

If you deal in anything PRE-AUCTION in Colorado, you must be aware of the Colorado Foreclosure Protection Act.  This law requires a specific set of disclosures, forms, and contracts, which requires the seller have a right of rescission.  Oddly, many real estate brokers don't know that this law applies EVEN IF THE NED HAS NOT BEEN FILED.  In other words, the seller can lie and say he's current on the loan, and if he's 3 payments behind, and the broker used the wrong form, you could be in a lot of trouble.

In short, if you are dealing in foreclosures (pre-auction) ask your broker if he or she knows the FPA in Colorado.  If not, get another broker.
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September 22 2013
I believe it just means that the owner has been served a Notice of Default.
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August 15 2013
Profile picture for zuser20140120081814583
On Zillow, "Pre-foreclosure" has a very specific meaning.  The definition is here:
http://www.zillow.com/foreclosures/overview/glossary/pre-foreclosure/

As you can see, that definition has nothing to do w/ what Mr. Moore & Ms. Neal said.  The house is not (yet) in foreclosure, but it might be soon.  The house is also not (yet) for sale, but it might be soon.

Based on the Zillow (I assume you meant Zillow when you said "here") definition, the current owner might be intending to catch up on his payments & stay in the house for the foreseeable future.  Or, he might be trying to figure out how to get out of there w/out damaging his credit rating (in which case a short sale could be in his future).  Or, they might be in a state of denial.  Or, anywhere in between.

Since the current owner of a pre-foreclosure house has not yet decided to sell, you might need to contact them directly (& tactfully) & ask if they are interested in selling.  You might be able to help your client get into a nice house while saving someone from being foreclosed.
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August 15 2013
Thanks :)
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August 15 2013
I hate that term since it means nothing and is confusing. It's like saying prepregnancy. You either are or are not in the process of foreclosure. Many use preforeclosure in place of the term Short Sale meaning they are trying to sell short before the home goes into the process of foreclosure. If it is being sold as a short sale then it will be listed with a Realtor and your Realtor can get all necessary information.


tim
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August 15 2013
 
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