Pre-foreclosure refers to the beginning phase of a legal proceeding that ultimately involves repossessing property from a defaulted borrower. In pre-foreclosure, the lender files a notice of default on the property because the borrowing owner has exceeded the contractual terms for delinquent payments. A notice of default informs the borrowing owner that the lender is pursuing legal actions toward foreclosure.
Pre-foreclosure can be an important phase because the lender may be open to a last rights negotiation on delinquent debt for the borrower. The borrower often has a final opportunity to potentially reverse the default status by either making up late payments negotiating a modification, or possibly opting to sell the property before it reaches a final foreclosure eviction.
Pre-foreclosure usually begins when the lender files a default notice on the property because the homeowner has exceeded the contractual terms for delinquent payments (often three months of delinquent non-payments).
In pre-foreclosure, mortgage borrowers can still have some options, including making backdated payments, negotiating a modification, or arranging a short sale.
Waiting on the Moratorium to Expire will cost you all of your equity in your home. You can get out of Foreclosure without selling your home.