What does pre foreclosure mean?

What a pre foreclosure label means

Pre foreclosure is the time after missed mortgage payments have put the loan in trouble, but before the foreclosure has been completed. A CFPB hosted research paper uses a narrower meaning: the phase starts with the first missed payment and ends with foreclosure referral or filing.

If you saw the label on a real estate website, do not treat the website as the foreclosure sale. The CFPB says state foreclosure processes require notice, and after the required notices and procedures a public auction generally may be held.

When pre foreclosure starts and ends

The federal 120 day rule matters because it controls when many mortgage servicers can start the first legal foreclosure step. CFPB Regulation X says a servicer shall not make the first notice or filing required for a judicial or nonjudicial foreclosure unless the mortgage loan obligation is more than 120 days delinquent.

There are limited exceptions. The same rule allows the first notice or filing sooner when the foreclosure is based on a due on sale clause violation or when the servicer is joining another lienholder's foreclosure action.

The same CFPB hosted research paper says the in foreclosure phase begins with the foreclosure filing and ends with eviction. So your loan can move from pre foreclosure to a filed foreclosure case or notice process before the final sale happens.

What notices you may see by state

The CFPB says foreclosure processes differ by state and are generally done in two ways. Judicial foreclosure is filed as a lawsuit, and the borrower can raise defenses in court. Nonjudicial foreclosure is done without filing a court action and uses required written notices under a power of sale clause in the mortgage or deed of trust.

In Indiana, Ohio and Wisconsin, expect court papers or court information if the lender files. Indiana's court system says the summons must tell a debtor about the right to participate in a settlement conference when a foreclosure action is filed.

Options during the pre foreclosure window

Your first option may be to bring the loan current. The FTC describes reinstatement as paying the entire past due amount, plus late fees or penalties, by an agreed date.

Other options depend on what the mortgage servicer will approve. The FTC lists forbearance, repayment plans and loan modification as options for homeowners who are behind or at risk of falling behind.

Regulation X also protects a complete loss mitigation application in certain timing windows. If it is complete before the first notice or filing, the servicer cannot make that first notice or filing unless one of the rule's conditions applies. If it is complete after the first notice or filing but more than 37 days before the foreclosure sale, the servicer cannot move for judgment or order of sale, or conduct the sale, unless one of the rule's conditions applies.

• Reinstatement means paying the entire past due amount, plus late fees or penalties, by an agreed date.
• Forbearance can lower or pause payments for a short time.
• A repayment plan can add part of the past due amount to regular payments for a fixed time.
• A loan modification can permanently change one or more mortgage terms so payments are more manageable.

Selling, short sale or deed in lieu

If the home is worth more than the mortgage balance, the CFPB says selling can be better for your money situation and credit than foreclosure, short sale or deed in lieu. The CFPB says you sell the home, pay off the mortgage and selling costs, and keep any remaining money.

If the home is worth less than the mortgage balance, the CFPB says to consider asking for approval on a short sale. A short sale needs servicer approval, and the servicer must agree to accept the sale money and forgive the difference.

A deed in lieu means turning ownership over to the mortgage servicer and moving out. It is different from selling because you are not responsible for finding the buyer. For more selling steps, read can you sell a house in foreclosure, can you sell a house with a mortgage and foreclosure selling help. Selling to a cash buyer is one possible path, but it should be compared with listing and with your servicer options.

Watch for foreclosure rescue scams

Foreclosure stress attracts rescue scams. The FTC says not to pay anyone who charges upfront fees or guarantees a loan modification or other solution to stop foreclosure.

Do not ignore lender, trustee or court mail. The Supreme Court of Ohio tells homeowners to open mail because the courts send important information needed to resolve the situation.

HUD approved housing counselors can help homeowners understand options. The CFPB says a HUD approved housing counseling agency can help you work with your mortgage company at no cost, and the FTC says housing counseling services usually are free or low cost.

Frequently asked questions

Sources

Checked against each source on November 3, 2026. This page is general information, not legal or tax advice.

1. CFPB research paper: Time on your side (Consumer Financial Protection Bureau)
2. 12 CFR 1024.41 Loss mitigation procedures (Consumer Financial Protection Bureau)
3. Ask CFPB: How does foreclosure work? (Consumer Financial Protection Bureau)
4. CFPB Avoid foreclosure (Consumer Financial Protection Bureau)
5. Trouble Paying Your Mortgage or Facing Foreclosure? (Federal Trade Commission)
6. Foreclosure Mediation in Ohio: What You Need to Know (Supreme Court of Ohio)
7. Mortgage Foreclosure Trial Court Assistance Project (Indiana Judicial Branch)
8. Foreclosure (Waukesha County Circuit Courts)