A pre-foreclosure is the time period from when the borrower misses 3 to 6 months of mortgage payments. The bank then starts litigation to foreclose on the property. Once they contact the courts and the borrower is served with notice that they (the lenders) have started the foreclosure proceedings, the home is considered a pre-foreclosure.

In other words, right before foreclosure.

Why should you go after a pre-foreclosure?

Banks are not in the business of holding on to properties. Although they do not want to take the house from the owner, they feel that they have no choice.  Lenders usually accelerate the proceedings because they are unable to get in contact with the borrower.

Borrowers sometimes feel like they are stuck between a rock and a hard place with no way to pay their mortgage. So instead of talking with the lenders, they rather “duck and dodge” their phone calls, not realizing this just makes matters worse.

The only good thing about pre-foreclosures for the borrower is, they have between one and two years before the actual foreclosure takes place. This means they can live in their home mortgage free for this time period.

This is the time that you get in to convince the borrower that you can help them get rid of the home before they have a foreclosure on their credit.