What is a Pre-Foreclosure?
A Pre-Foreclosure refers to the time period from when the homeowner defaults on the note to time up until a forced foreclosure sale occurs, which effectively transfers the title of the property from the borrower to the bank or the winning bidder at a foreclosure auction.
In Texas, a lender initiates the foreclosure process through a notice of default and it culminates in the certificate of sale, when title transfers out of the borrower’s name. As long as the title to the property remains in the borrower’s name, they have the full bundle of rights of property ownership including ability to transfer the property. This time period is “pre-foreclosure.”
When the forced sale occurs at the foreclosure auction, the pre-foreclosure period is over. The borrower loses their ownership rights when title transfers from the borrower’s name into either the bank’s name or the winning bidder at a foreclosure auction that the house.
There are many ways to avoid foreclosure. The borrower is in control up until the foreclosure auction.
If you have any further questions about foreclosure, please contact us.