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Foreclosure is an extensive process and there are alot of terms you should be familar with as homeowner.

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A B C D E F L M N O P S T U W

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A

Acceleration – A term in a mortgage agreement that allows the lender to request entire balance of the mortgage loan be paid in full, typically occurs after default.

Arrearages—past due payments.

Arm—adjustable rate mortgage is a loan where interest rate adjusted periodically anywhere from every six months or a year. The rates are often below market, but continue to increase and may ballon to higher payments during the life of the loan.

B

Bankruptcy –federal legal right that provides debt relief assistance for individuals who meet certain income requirements.


C

Complaint—a claim for which claim on which relief is sought.

Credit history –a record of an individual's or company's past borrowing and repaying, including information about late payments.

Credit score—a numeric score that measures the credit worthiness of an individual based on credit history, payment history, credit balances, and the number of recent inquires.

Creditor –person or company who extends a credit to debtor (mortgagee, lienholder, lender).

D

Debt Consolidation - Combining multiple loans into a single loan, often at a lower interest rate and having lower monthly payments 

Debt Ratio - Also called debt to income ratio, which is a loan qualifying ration used by lenders to determine if a borrower qualifies for a loan. It is calculated by taking the borrower's monthly debts and dividing it by their monthly income. 

Default - Failure to meet legal obligations in a contract, such as failing to meet monthly debt payments.

Deficiency –difference between the amount owed on a mortgage note and what the foreclosing party receives on the sale of the foreclosed property at auction.


E

Equity –when the fair market value of real estate exceeds the amount of indebtedness on the property.

F

Foreclosure –legal process by where a homeowner is disposed of their interest in real estate.

1. Judicial foreclosure –foreclosure process must be executed through state court. This means the creditor must sue the debtor/homeowner in state court to receive the possession of the property.
2. Non-Judicial foreclosure –foreclosure process can be executed by sale once default occurs, without initiating an action in state court. The power of sale clause is typically in the mortgage agreement.

Federal Housing Authority (FHA) Loan—a federally insured mortgage loan.

Forbearance – When a lender agrees to postpone foreclosure in order to give the borrower time a catch up with arrearages.

H

Home owner Association (Planned Communities)—an association created by an individuals in a residential subdivision for the purpose of enforcing the planned community laws and or the bylaws created by a developer and or modified by that association.

L

Levy—the collection of a liability which occurs once a debt is defaulted upon and becomes mature.

Lien ­- A claim or interest on the real estate property stemming from an unpaid debt.

Lis Pendens—a suit pending in a court that concerns the title to land.

Loan modification – lenders agreement to change the terms of the mortgage agreement by either decreasing the amount of monthly payments, lengthen the term of the loan, and or decreasing the amount of interest on the loan.

M

Mortgagee—(SYN) lender, bank, creditor.

Mortgagor –(SYN) borrower, homeowner, buyer, debtor.

N

Negative equity—when the value of the property is less than the amount of indebtedness.

Note –promissory note securing an interest in real estate. Usually recorded in the county where the real estate is situated to evidence notice of the lenders interest in the property.

Notice—a period of warning required by law and or instrument (mortgage agreement).

O
Ownership classifications

1. Tenancy by the Entirety – The joint ownership by husband and wife where surviving spouse becomes the sole owner. Creditors of only one of the spouses cannot make claims to real estate titled to both spouses.
2. Tenants in common—co-owners in real estate without rights of survivorship.
3. Joint tenants—joint ownership by non-spouses who have the right of survivorship. Last tenant becomes the sole owner of the property.

P

Power of Sale-Clause in a mortgage or deed of trust giving the mortgagee (or trustee) the right and power to advertise and sell the property at public auction on default in the payment of the debt secured.

Primary mortgage-- A first lien/mortgage on real estate property.

Priority—dictates which lien first in right (and time) to claim against real estate. In the case of foreclosure creditors or lienholders on a property get paid according to priority and often times not at all if they are after a primary lien holder.

R

Refinance –process by which a homeowner cashes in the equity in a property and pays off existing mortgage by acquiring a new one.

Right of Redemption –right of a homeowner to cure default prior to the close of foreclosure proceedings.

S

Sheriff Deed—A deed issued by sheriff at a sheriff sale.

Sheriff sale—A court order authorizing the Sheriff’s office to conduct the sale in satisfaction of a judgment.

Short sale –process whereby a lender agrees to allow homeowner sells the piece of real estate for less than the amount of the mortgage debt, contingent on the lenders approval of the buyers.

T

Tax liens – a claim for unpaid taxes.

Title search –Search of public recorded information to determine the legal ownership to the property.

Trustee deed -- Document conveying ownership of property to highest bidder at a Trustee Sale.

U

Unsecured Debt - Any type of debt that is not collateralized by a specific asset in the event of default 


W

Writ –A form of written command in the name of a court or other legal authority to act.