by Sidney A. Pashkow
© 12/00 Foreclosure News of NJ, Inc.

They are exactly what the name implies. Pre-foreclosures are real estate where the owner(s) has not made the proper payments as described in the terms and conditions of the mortgage and note.

This is usually brought about by several factors. Either the primary bread winner has lost their employment or marital difficulties develop as a result of loss of income or there has been a health crisis in the family or a combination of two or all three of the factors.

The lender (Bank, Mortgage Company, Mortgagee, Plaintiff) is not satisfied with the conduct of the borrower (property owner, defendant, borrower). The lender or the lenders agents have been instructed to notify the borrower(s) through the plaintiff's attorney that they intend to foreclose on the property if the original terms and conditions of the loan are not cured immediately! This is commonly known in New Jersey and the thirty day notice.

If, within the thirty day notice, the borrower has not cured the loan, or answered the notice, the lender files a complaint in the proper court. The presiding judge in that court reviews the complaint and if all of the evidence presented in the brief, as required by law, is correct and complete, the court approves the file and a official court docket number is assigned and the pre-foreclosure is now valid.

These legal things occur in sequence as described above. This information is published here, at NJPForeclosures.com. The information published is all gleaned from the Court complaint file. It is a matter of public record. Also, this is the first two stages of many more to follow. The complaint is filed months before the County Sheriff has to, by statute (law) advertise the imminent foreclosure sale.

The lender has a long period of time before they are obligated in filing a Lis pendens (suit pending). At this stage of the foreclosure the Sheriff schedules a date of the auction, absolute sale. This is still a pre-foreclosure. The borrower still owns the property and is still the only one who can sell and or transfer ownership of the real estate to some one else.

Months and sometimes years may pass before the Sheriff holds the weekly auction. During this period of time the borrower can and some times does, cure the violation of the agreement with the lender. Occasionally, the borrower will go into Bankruptcy. There are many ways this can be done. This action can hold up the Sheriff's sale of the property. It is still a pre-foreclosure.

Finally, if after all roads of curing have failed, the real estate goes up for auction at the weekly Sheriff's auction. Bidders offer their money. The highest bidder secures the property at the auction. This is still a pre-foreclosure. Ten days must pass before the auction is finalized. This period of time is know as the redemption period.

During this ten day period the owner of the property may cure the discrepancies against the real estate. If the terms and conditions of the redemption are not fully met, the Sheriff issues a Sheriff's Deed to the one who bid the highest price at the auction. It is no longer a pre-foreclosure, it is a Foreclosure.

In the simplest terms, the real estate is now known as a foreclosure or if the lender is the successful bidder, it is commonly known as Real Estate Owned (REO). NJPForeclosures.com does not publish REO's. We publish only Pre-foreclosures.