At this point, bargain hunters swing into action to contact defaulting borrowers to see if there is a "preforeclosure opportunity" during the lender's reinstatement period before the official foreclosure auction.

This reinstatement period, which can be as short as 21 days in the state of Texas but can be as long as 3 to 6 months in most states, gives borrowers time to either sell the property or reinstate the mortgage before losing the property at a foreclosure sale.