Common Home Foreclosure Terms

Affidavit: A sworn statement under oath in writing usually in the presence of a notary.

Arrearage: The past due balance on your real estate loan and includes the balance due on the loan, unpaid interest, late charges and statutory attorney fees and costs.

Assignment: The transfer of real property to be held in trust or to be used for the benefit of the lender.

Auction: Usually the final phase in the foreclosure process in which your property is sold to the highest bidder.

Certificate of Sale: A legal document tendered to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.

Credit Bid: A bid usually on behalf of the lender at a foreclosure auction. The bid amount must be less than or equal to the balance of the loan that is in default.

Deed: A legal document in which ownership of real property is conveyed from seller to buyer in a real estate transaction.

Deed of Trust: A legal document in which the borrower (trustor) pledges the property to a neutral third party (trustee) as security for repayment of the loan to the lender (beneficiary).

Deed in lieu of Foreclosure: The process and legal instrument in which the lender agrees to accept the deed to your real property in lieu of foreclosing and selling your property.

Default: Usually a breach of the obligations in a promissory note in which the borrower has failed to comply with the terms of repayment in accordance with the loan and which the lender considers the default to be a material enough to be in breach of the contract.

Deficiency: The difference between the balance of your unpaid loan and the proceeds received by your lender from the foreclosure and sale of your property.

Equitable Title: The legal right to possess property and to acquire legal title once certain conditions are met.

Fair Market Value: The market price of a property in the open market.

Forbearance: The lenders agreement to refrain from foreclosing on your property for the purpose of affording you additional time to repay your loan in full.

Judgment: The judicial decree which is issued by the trial judge after the hearing and presentation of the evidence and which states the specific outcome of the lawsuit, specifically whether the

plaintiff lost or won and the sums owed, if any, between the parties to the lawsuit. A judgment can be appealed to a higher court for review of the decision if there was an error of law during the judicial proceedings.

Lis Pendens: A written notice of a pending legal action which filed and recorded in the county recorders office relating to the specific property and which serves to notify subsequent buyers and lenders that a lawsuit has been filed involving the property and or its possession.

Promissory Notes: A written promise that legally obligates you to repay a specified sum that has been loaned to you by the mortgage lender.

Short Sale: This is where your lender has agreed to accept less than the full balance owed to them on the loan when your property is sold.

Trustee: This is the name of the party that holds legal title to the property as collateral to secure your repayment of the loan.

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