A pre-foreclosure property is one where the borrower is delinquent and the lender has begun the foreclosure process, but the property has not yet been sold at auction. A short sale is a specific resolution where the lender agrees to accept less than the outstanding balance as payment in full. Not every pre-foreclosure becomes a short sale: some borrowers cure the default, some lose the property at auction, and some complete a deed in lieu.
Foreclosure Timeline Overview
- ✦90 to 120 days delinquent: lender files Notice of Default or lis pendens depending on the state
- ✦30 to 60 days after Notice of Default: Notice of Trustee Sale or court hearing is scheduled
- ✦Nonjudicial foreclosure: 20 to 45 days from Notice of Trustee Sale to auction in most states
- ✦Judicial foreclosure: 6 to 18 months to sale in many states due to court backlog
- ✦Short sale: can be initiated at any point after default notice and must close before the auction date
Short Sale Deficiency Risk by State
Whether the lender can pursue the borrower for the remaining balance after a short sale depends on the lender approval letter and state law. Many short sale approval letters explicitly waive deficiency claims as a condition of approval. California purchase money short sales are protected by anti-deficiency statute. In recourse states where the approval letter is silent on deficiency, confirm the waiver in writing before the borrower signs the approval agreement.
Waiting Periods for Future Financing After Short Sale
- ✦Conventional Fannie Mae and Freddie Mac: 4-year wait after short sale; 2 years with documented extenuating circumstances
- ✦FHA: 3-year wait after short sale completion date
- ✦VA: no mandatory fixed period; 2 years is the standard; handled case by case
- ✦USDA: 3-year wait after short sale
Aria can confirm waiting period requirements after short sale, deed in lieu, or foreclosure for any agency loan type. Ask at vicariointel.com.
7-day free trial. No credit card required.
Ask Aria About Post-Hardship Waiting Periods →