Real Estate Stew - Difference Between Foreclosure and Pre-Foreclosure - YouTube

Kiesha: Hey, guys. You're here once again with The Real Estate Stew with the What's Cookin Crew. I'm Kiesha.

Patrick: And I'm Patrick, guys.

Kiesha: As always, we've got some great answers to some of your hottest real estate questions.

Patrick: Well, on that note, let's see what we've got.

Kiesha: We don't want to keep you all waiting. I know you have some good stuff.

Patrick : You want to pull one?

Kiesha: Go for it.

Kiesha: There's a lot in there, though. Thank you guys for that. We have a lot of questions.

Patrick: There's actually quite a few. Oh, wow. Okay. This is a good one, Kiesha.

Patrick: What is the difference between a foreclosure and a pre-foreclosure?

Patrick: The difference between foreclosure and pre-foreclosure.

Kiesha: Hmm. That's a great question.

Patrick: Excellent, excellent. Kiesha: Yes.

Patrick: You know what? I think it would probably great.

Patrick: Let's start with foreclosure, because most of you are going to relate to that. You hear that.

Kiesha, why don't you start us out. Foreclosure.

Kiesha: Absolutely. Yes, since that's the most familiar.

Foreclosure basically means for a homeowner that the home has been reclaimed or claimed by an entity

, typically because of some type of non-payment.

Patrick: Default.

Kiesha: Yes, a default. When you purchase a home, you sign agreements with lots of entities.

Kiesha: You agree to pay taxes. You agree to abide by the rules of the HOA.

Patrick: Correct.

Kiesha: You agree to pay the HOA, if there is one.

Patrick: Agree to pay your lender.

Kiesha: Yes. Oh, yes. The mortgage. You have to pay that, too.

Kiesha:. So all of those things can, or not doing those things, I should say, can lead to foreclosure,

where the entities step in and basically say, "You're not following the rules." So if you don't pay, you don't stay.

Patrick: You don't stay.

Kiesha: That's how we summarize the document that you sign at the time of closing.

Keisha: Essentially, when a house is on the market or being resold as a foreclosure,

Keisha: that's what's happened before it's gotten to that stage.

Keisha: Now, pre-foreclosure, on the other hand, is the precursor.

Patrick: That's the precursor. You know, guys, when you think pre-foreclosure,

Patrick: what I always like to tell people is know that there's many triggering events,

Patrick: , and there's also many options, depending on again, as Kiesha said, what entity you're dealing with.

Patrick: There's something called short sale you may have heard about, but there are many things.

Patrick: There's short sell, there's deed in lieu, there's forbearance, there's loan modification.

Kiesha: Yes

Patrick: Now, all of these things deal with your actual lender, the mortgage company.

Patrick : They will give you those options prior to a foreclosure in an effort to help you avoid the foreclosure.

Patrick: Contrary to popular belief, guys, most lenders ... Lenders aren't in the business to sell real estate.

Patrick: They're in the business lending money ...

Kiesha: To lend money.

Patrick: ... and making interest on that money, etc., so they truly aren't ...

Patrick: Most of them aren't wanting to foreclosure on your property ...

Kiesha: Absolutely.

Patrick: ... so they'll give you all these options to work through it. So keep that in mind.

Patrick:. I do recommend when you're thinking of these terms,

Patrick: , definitely consult with a professional, such as attorneys ...

Kiesha: Absolutely. A real estate agent.

Patrick: ... and CPAs, real estate agents

.Kiesha: Absolutely, absolutely. One thing I need to also add in, because we're here in the state of Texas,

Kiesha: some of the things that we mention will be specific to Texas.

Patrick: Very specific to Texas.

Kiesha: For example, if you do find yourself in a situation where there's a foreclosure process starting,

Kiesha:, Texas is a non-judicial state. Excuse me.

Patrick: You got it. Also, guys, let me add. There are states, as Kiesha said, that it's going to be very specific.

Patrick: Judicial, non-judicial, but here in Texas, you actually can do both.

Kiesha: Right.

Patrick: You can do judicial or non-judicial. For many of you, you're like, "What do you mean? What do you ..."

Patrick : Well, you can always, again, reach out to a professional, realtors, etc.,

Patrick: and they can go into more details with you on that.

Kiesha: Absolutely. Absolutely. Anything else you can add on that topic? That was a good question.

Patrick: Excellent, excellent. It's one of those, Kiesha, that we could talk on for hours,

Patrick: but I think we've given enough information to help you guys understand that, number one,

Patrick: always seek advice prior to, and know that you can definitely avoid a foreclosure

Patrick: and pre-foreclosure is the platform to do that.

Patrick: Just because you get behind on your payments, guys, understand you have options.

Kiesha: Absolutely.

Patrick: Well ...

Kiesha: If you have more great questions, please send them to us.

Patrick: You know they do, Kiesha. We know you've got great questions for us.

Kiesha: And we thank you for that. You can reach us at [email protected].

Keisha: As always, please remember to subscribe ...

Patrick: Like.

Kiesha: ... and comment.

Patrick: Don't forget, guys. We'll see you next time.

Kiesha: Bye, you guys.

Patrick: Bye.