Preforeclosure Vs Short Sale

What is the difference between a short sale and a preforeclosure?

thank you!

-J

Comments(4)

jjetts416th January, 2004

a pre-foreclosure also known as lis pendens is when the person is about to go into foreclosure. a short sale is when someone negotiates with the bank on a lis pendens a agreed upon price to get the house out of lis pendens and purchase it.
JonDoe16th January, 2004

so is a 'preforeclosure' a form of a deal? or is it just a condition? If it's a type of deal, what's the deal?

Thanks again.

-J
TheShortSalePro16th January, 2004

'Preforeclosure' is an indication as to the status of the mortgage loan, while a 'short sale' is a transaction.

A 'short sale' occurs when a foreclosing lienholder agrees to facilitate a sale whose anticipated proceeds would not be enough to payoff all liens by accepting less than they are contractually due

For the purpose of this post, let's agree that a loan in 'preforeclosure' is the time between the Borrower's first missed mortgage loan payment, and the forced, public sale of the property.

Short Sales generally occur when a loan is in the preforeclosure stage...

A lis pendens (suit pending) is a recorded document filed by the mortgagee's attorney that alerts the public that the subject property is subject to litigation. [ Edited by TheShortSalePro on Date 01/16/2004 ]
JonDoe16th January, 2004

thanks for the clarification!