pre-foreclosure to foreclosure

I am trying to understand the dynamics of a foreclosure. At what point does a pre-forecloser become a foreclosure. And what is it after the Sheriff sale?

The property is in pre-foreclosure until the sheriff sale. Then the bank (or auction winner) owns the property. Many times they are referred to as foreclosures, even if the actual sale hasn’t happened yet. Technically it isn’t an actual foreclosure until the auction, but full foreclosure proceedings are happening up until that point.

Thank you Lori

As a wholesaler, I am trying to find all the info I can. I am looking threw all the docs on this site. How do I approach a bank? What do I say? Bits of help is what I am looking for.

The homeowner is still the legal owner until the foreclosure proceedings. So its going to be your maximum benefit if you could get hold of the homeowner while its still in pre foreclosure stage. And you’ll going to have only one shot at the most if you get in contact with these folks.

It’s a conundrum. What I was told was…

Homeowner in default (late pay) — Bank files for foreclosure — Auction — Bank owns property
------- Preforeclosure ------------> -------------- Foreclosure -------------> ------ REO ---------->

What I know for certain is that a REO is NOT a ‘property in foreclosure’, regardless what the people who want to sell you ‘foreclosure listings’ claim.

Seems like you’ve got it pretty right. In California it works like this:

  1. Payment not received for three months = Notice of Delinquency
  2. Payment still not received = Notice of Default
  3. Property is advertised for sale by the trustee
  4. Lender will bid the amount owed by the owner - in California the lender cannot bid more than what is owed.
  5. Highest bidder gets the property

If there are no bids as high as the amount owed, the lender gets the property - Real Estate Owned (REO). Of course, the trustee can accept a lower bid - but they usually don’t.

Here there is a requirement that the trustee advertise the property in default in a local newspaper. I read the local newspapers to see what is coming up for sale.