Bankruptcy: A legal alternative that allows the borrower to clear any debt obligations by restructuring the payment terms. A bankruptcy stops the foreclosure process until the bankruptcy process is completed or the court allows the lender to resume the foreclosure.
Broker Price Opinion (BPO): (Also called comparative market analysis), An estimate of probable selling price of a residential property based on selling prices of comparable properties in the area or a drive-by inspection.
Deed in Lieu: Voluntary conveyance of title in exchange for a discharge of debt.
The house must be free of other liens and must have clear title.
Deed of Trust: A legal document that dictates the terms of a loan used to buy a property and transfers the ownership of the property to a third party called a trustee until the loan has been paid in full.
Default: occurs when the borrower does not meet its legal obligations according to the loan terms
Forbearance: Under forbearance agreement, the lender agrees to stop the foreclosure process and determines payment terms that in certain time will bring the borrower current.
Foreclosure: A process that enables a lender to recover the amount owed on a defaulted loan. The lender has the option of selling the property or repossessing the property. The beginning of a foreclosure process is initiated when a borrower defaults on mortgage payments. The lender then files a Notice of Default or Lis Pendens.
Lien: A legal claim on a property by a lender, or other entity, (called the lien holder) against the property owner that owes the money.
Modification: A lender agrees to modify any or some of the terms of the mortgage. This is a process where an existing note is modified, but not cancelled. Changes may include: extend the term of the loan, change the monthly payments, change the interest rate, etc.
Notice of Default (NOD): A publicly recorded notice that a property owner is behind scheduled loan payments for a loan secured by a property. This process is required in few states to begin the foreclosure process if a borrower is in default.
REO (Real Estate Owned): A status that indicates that the property is owned by the lender or bank as a result of a foreclosure.
Short Sale: (Also called "Short Pay" or "Pay Off") A process in which a lender agrees to receive a lower amount of an owed debt in exchange for the sale of the property to a third party.
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