What is the true definition of a foreclosure and a short sale?
A foreclosure is a situation in which a homeowner is unable to make their house payments/mortgage payments, so the lender who holds the note, will file a notice of default (depending on the state in which the house is located). In California, the lien holder must wait for 90 days before they can set a sale date. No sooner than 20 days after the 90 day period can a trustee sale be set. When the trustee sale date is set, the home will be sold at public auction for the amount of the debt plus foreclosure costs. So, a non-judicial foreclosure can take up to 120 days from the recordation of the NOD. Again, it varies from state to state. In some states, a Lis Pendens is filed, which is a law suite against the borrower. In some cases, to avoid foreclosing on a home, creditors try to make adjustments to the repayment schedule to allow the homeowner to retain ownership. This situation is known as a special forbearance or mortgage (loan) modification. A short sale is a sale of real estate in whi
