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If you are currently facing the stress of an impending foreclosure, you may struggle to understand it all. Or you may be interested in learning more about foreclosure. For your convenience, we have assembled a small glossary of simplified foreclosure and general real estate terms.
The bank has repossessed a house or other property, which is now being sold.
Declaration of Default
A formal legal statement by the lender says the borrower has failed to make payments on time according to their loan agreement.
Deed in Lieu
Also known as a "deed in place of foreclosure." It is when you are behind on mortgage payments, and the lender agrees to let you surrender your home willfully rather than foreclose on the property.
Deed of Trust
Used in a three-person transaction, a Deed of Trust allows a third party to hold onto the property's title until the borrower has paid the lender in full for the loan.
It refers to the target of a lawsuit or legal action. In real estate, it is typically a borrower who still needs to follow through on payments per the loan agreement.
It is a lien placed on the debtor in a case where the sale of a property to repay a secured loan does not pay the debt in full.
The legal action of a lender to sell the property is used to secure the loan to collect money owed due to missed payments.
A public, cash-only auction to sell foreclosure homes.
It is a situation where the borrower transfers the property title to a trusted third party. He understands that the title will be transferred back to the borrower when the loan is paid in full.
Suppose the lender lacks a "power of sale" clause in the lending agreement, and the borrower ceases making payments. In that case, the lender can go to the courts to request a judicial foreclosure.
The right to the property of a borrower until their debt is paid in full.
It is a loan to purchase land, a home, or real estate. The borrower agrees to repay the debt in a specified amount of time.
Paying off a loan faster than required by the terms of the loan agreement. Mortgage acceleration can reduce the effects of compounding interest.
It is a legal foreclosure by the lender, and he has the right in the "power of sale" clause of a mortgage agreement.
Notice of Default
A written notice to the borrower that states the predetermined payment agreement has yet to follow. It is an early warning sign of foreclosure.
Notice of Pendency
It notified the parties involved that the court was considering a real estate lawsuit.
Notice of Foreclosure Sale
It is a notice of a home being sold at a foreclosure auction. Typically at least 30 days before the bidding is set to begin.
The party is taking legal action against the defendant.
It is a property in the early stages of foreclosure due to the failure of a borrower to make mortgage payments.
Real Estate Owned
REO, also known as bank-owned, is a property owned by a bank that has not sold at a foreclosure auction.
A period in which the borrower has a final chance to repay the lender the amount owed.
Right of Redemption
It is the debtor's right to reclaim a property that has been foreclosed upon if they can come up with the amount owed.
A lender-approved sale of the home in which the proceeds from the sale will not cover the total amount owed on the mortgage. The lender agrees to release the borrower from the remaining debt once the sale is complete.
It is an order to appear before a judge in court.
Public records search intends to determine the property's legal ownership and discover any outstanding liens on the property.
It is an individual or board member with administrative powers about a property in trust with a legal obligation to release the property rights only when the agreed-upon terms are met.