Copy of `Understanding forclosure - Foreclosure Terminology`

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Understanding forclosure - Foreclosure Terminology
Category: Economy and Finance > Foreclosure
Date & country: 21/01/2008, UK
Words: 583

Is the process of transferring a title or interest in real estate to a different owner.

Is the last state of the appraisal process where the appraiser reviews data and estimates the subject property's value.

Are agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or restrictions on the stated property.

Is the amount of money an insurance company pays in response to a claim.

Is the willingness of a borrower to repay borrowed money. Usually it is measured by a borrower's past record of payments on loans and debts, which is found in a credit report.

Credit bid
Is a bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan that is in default.

Cured default
Correction of a borrower's failure to make payments or to meet the terms of a loan to the lender's satisfaction.

Current value
Is the value of the property at the time of an appraisal.

Days on the market
Is the time between when a property is listed for sale and the date of the sale when it is taken off the market.

Is money that is owed by one person to another.

Is the final order of the court in many states.

Is a legal document transferring the ownership of a piece of property.

Deed of reconveyance
Is an document that releases and discharges a deed of trust.

Deed of restriction
Is a restriction imposed in a deed that limits the use of the land. Deeds may include clauses preventing the sale of liquor or defining the size, type, value, or placement of improvements.

Deed of Trust
Is a deed given by the property owner that secures performance of an act (such as making payments on a loan). A deed of trust is a type of mortgage.

Deed-in-lieu of foreclosure
Instead of waiting until the lender forces the sale of the house in foreclosure, usually to the lender, the borrower just deeds the property to the lender.

Defeasance clause
Is the clause in a mortgage that permits the mortgagor to redeem their property upon the payment of the obligations to the mortgagee.

In medieval times ownership rights constituted a fee. To be defeased meant to lose the fee, or today, to lose ownership.

Deferred maintenance
Are repairs or maintenance on a property that's been postponed and results in a decline in the value of the property.

Is money that a borrower who has lost their real estate in a foreclosure still owes to the lender because the foreclosure sale failed to generate enough to pay off the loan.

Deficiency judgment
Is a court judgment where a defaulting borrower owes a deficiency.

Delinquent mortgage
Is a mortgage where the borrower is behind on their payments. The borrower is then given a specified number of days to bring the payments up to date or the lender may begin the foreclosure proceedings.

Demand note
Is a note that is payable on demand of the holder.

Is the money that the buyer gives with an offer to purchase something. It is also lso called earnest money.

Is the decline in the value of a property.

Dept assumption letter
Is the transfer of debt from one party to another. The contract of assumption needs to be signed by both parties. It is also known as an assignment of debt.

Discharge of indebtedness
Where a lender tells a borrower that a loan doesn't have to be paid back, also called a discharge of debt.

Is a statement disclosing relevant information on a property to a potential buyer of that property.

Discount points
Are fees that are paid by borrowers to lenders to get a lower interest rate. The lender offers a borrower pay points that adjust the interest rate to the market rate. One point equals one percent of the loan amount.

Is the phase of a lawsuit where respective parties are permitted to ask each other formal written and oral questions, obtain copies of documents and find out the facts related to the lawsuit.

Distressed property
Is property that's in poor physical or financial condition.

Documentation preparation
A fee that is charged by the escrow company or attorney to ready the paperwork for closing.

Is the primary or permanent home of an individual.

Down payment
Is the money paid by the borrower out of their own funds upon the purchase of a property and not included in the loan or mortgage.

Are payments taken from a construction loan to pay subcontractors or suppliers.

Dual agency
Is where a real estate agent represents both the buyer and the seller in a transaction.

Dual agent
Is a real estate agent who represents both the buyer and the seller in a transaction.

Due on Encumbrance
Is a clause in a mortgage preventing a borrower from encumbering title to the property with liens, leases or other encumbrances without the lender's consent.

Due-on-sale clause
Is a clause in a mortgage demanding that the borrower pay off the loan in full if the house is ever sold.

Early occupancy
Is when the buyer is allowed to occupy the property before the sale of it is complete.

Earnest money
Is the money the buyer gives with an offer to purchase something.

Is a right given to a third party to use a portion of a property for certain purposes.

Effective age
Is the estimated age of a structure; calculated by the condition of the structure.

Effective gross income
Is additional income a lender takes into consideration when assessing an application for a loan.

Eminent domain
Is the government`s right to take private property for public use.

Is any structure extending onto the property of another owner.

Is a claim, lien, right or an interest in a property which complicates the transfer of title process.

End loan
Is the change for the buyer from the construction loan to a permanent loan at completion of the construction of an entire building project.

Is the individual who signs over ownership of a property to another individual.

Entry and possession
Is a method of foreclosure in which the lender, who already owns the property, reenters the property and takes possession from the borrower, either peacefully or by court order.

Is an appraisal of all property that is within an area for the purpose of equalizing values to ensure that taxes are assessed equally and fairly.

Equitable title
The right to possession with the right to acquire legal title once a condition has been met.

Equity cushion
Is the amount of equity required by a lender before they will make a loan.

Equity loan
Is the Junior or subordinate loan based on a percentage of the equity.

Equity right of redemption
Is a right of the owner to avoid foreclosure by paying the debt, interest, and costs.

When the ownership of a property reverts to the state when an owner dies not leaving a will.

Is a neutral third party that holds the documents and money during a real estate transaction ensuring that all the conditions of the sale are met.

Escrow account
Is an account that holds funds for the payment of expenses on the sale of a property. Known also as an impound account.

Escrow agent
Is a neutral third party holding the documents and money during a real estate transaction and ensuring that all the conditions of the sale are met.

Escrow analysis
Is a periodic examination of an escrow account determining if the lender is withholding enough funds from the borrower`s monthly payment to pay for expenses including property taxes and insurance.

Escrow closing
Is the period of time when all the conditions of a real estate transaction have been met and the title to the property is transferred to the buyer.

Escrow company
Is a neutral third party holding the documents and money for a real estate transaction and ensuring that all the conditions of the sale are met.

Escrow payment
Are funds a lender withdraws from a borrower`s monthly escrow amount for payments of property taxes and/or insurance.

Is the total assets and individual has at the time of their death.

Estimated closing costs
Is an estimate of the incidental expenses due upon the sale of a property. These expenses are in addition to the price of the property and are prepaid at closing.

Estimated taxes and insurance
Is an estimate of monthly fees for taxes and insurance a lender uses to evaluate a borrowers monthly household expenses.

Estoppel certificate
Is an instrument executed by the mortgagor taht sets forth the status of and the balance due on the mortgage as of the date of the execution of the certificate.

A legal procedure removing a tenant from a property.

Exclusive agency
Is an agreement or contract to retain a specific agent for the sale of a property. If a second agent makes the sale, both are entitled to the commission.

Exclusive buyers agent (EBA)
Is an agent or company working exclusively with buyers as a fiduciary agent.

Exclusive listing
Is a contract giving an agent the exclusive right to market a property for a specified period of time.

Exclusive right to sell
Is an agreement to give, for a specified periodof time, one broker the exclusive right to sell. If a sale during the term of the agreement is made by the owner or by any other broker, the broker holding the exclusive right is entitled to compensation.

Executed contract
Is a contract in where all the parties have fulfilled their promises.

Execution sale
Is the sale of a property by a sheriff pursuant to a court order.

Is a person or court appointed individual who is to carry out the instructions in a will.

Is the removal of a piece of property from the tax base. The exemption may be partial or complete.

Express agreement
Is a verbal contract.

Extending the loan term
Means to give the borrower more time to repay a loan.

Extension agreement
Is an agreement extending the life of a mortgage.

Is a real estate professional that assists with the transaction but does not have an agency relationship with the buyer or seller. Also known as a transaction broker or intermediary.

Fair credit billing act
Is a federal law that protects consumers against violations involving credit and charge card billing errors.

Fair credit reporting act
Is a federal law designed to regulate procedures, prevent old or inaccurate information from remaining on records and gives the right to individuals to inspect their own credit files.

Fair housing act
Is a federal law that makes it illegal to refuse to rent or sell to individuals based on race, color, religion, sex, national origin, family status and disability.

Fair market value
Is the amount a willing and knowledgeable buyer would pay and seller would accept in a property transaction.

Fannie Mae
Is the Federal National Mortgage Association. A shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Farmers Home Administration (FmHA)
Is a U.S. Department of Agriculture agency providing credit to farmers and rural residents.

An abbreviation for foreclosure, used on borrower's credit record.

Federal Reserve Board
The Federal Reserve Board that consists of a group of economists and other experts that set the nations monetary policy, control inflation and interest rates.

Federal Trade Commission (FTC)
A government agency that regulates companies and industries such as credit bureaus, collection agencies, timeshare operators and some creditors.

Fee simple
Is a type of ownership where the owner has maximum interest in the property which entitles the owner to use the property in any manner they choose in accordance with state and local laws.

Fee simple absolute
Is a type of ownership where the owner has maximum interest in the property which entitles the owner to use the property in any manner they choose in accordance with state and local laws.

Fee simple defeasible
Owner of the property holds a fee simple title that is subject to certain conditions.

FHA loans
Mortgages that are insured by the Federal Housing Administration (FHA). The FHA loan plans are for investors and purchasers of rural property, and provides low-rate mortgages to buyers who make a down payment as low as 3 percent.

Fiduciary duty
Is the relationship of trust that buyers and sellers expect from their real estate agent, or a legal or business relationship.

Financed closing costs
Are Costs added to the loan amount upon closing.

Finders fee
Is a fee that is paid to another individual.

Firm commitment
Is a lenders promise to loan money for the purchase of property.

First lien
Debt that is recorded first against a property.

First mortgage
Is the primary mortgage on a property.

Fixed installment
Is the monthly payment installment on a home loan.