The pre-foreclosure status is when somebody is starting to miss payments. They’re 30, 60, or 90 days behind. It’s inevitable that they’re going to get a letter from the bank or an attorney that says that the property is now going to go to auction. Once they’re at the 30, 60, or 90 days that’s kind of the pre-foreclosure period and people need to take action sooner rather than later because it’s important that the bank gets all the necessary documentation they need in order to do a short sale.

That documentation is going to be the last two months of bank statements, the last two paystubs, the last two years of tax returns along with a hardship letter, along with a financial form that kind of shows all the income flowing into your house and all the expenses that flow out. Essentially that’s the short sale package in a nut shell, along with any necessary disclosure that the bank may want or that the agent may also want.

The sooner somebody can address it the better their case will be during the entire transaction. Gathering the paperwork is a majority of the battle for people. If you make a really strong case for a short sale and you presented all the documents the way the banks want them there is a good chance that if a foreclosure date has been scheduled you can stop the foreclosure.