|
Residential Environmental Hazards and Home Owners Guide to
Earthquake Safety
Common Terms in Today's Real Estate Market
While visiting this site or preparing to purchase or
sell in today's market you need assistance with some of the terms
and terminology of real estate; please refer to this brief
dictionary. Feel free to call or email with further questions.
Advertising- (or Publishing)
A copy of the Notice of Trustee Sale must be published once a week
for three weeks.
Bankruptcy-Chapter 7
Often called a straight bankruptcy-involves the liquidation of all
non-exempt by the bankruptcy trustee, who in turn distributes the
proceeds to qualified creditors. All dischargeable debts are
discharged and the person(s) filing receive a ‘fresh start’.
Bankruptcy-Chapter 13
Often called a debt reorganization. A Chapter 13 Bankruptcy is
generally appropriate for those individuals who have non-exempt
property they wish to retain and who have enough income to
reasonably pay the reorganized debt after covering reasonable living
expenses.
Beneficiary
The beneficiary in a foreclosure context is generally the mortgage
lender. Frequently referred to as the ‘Benny’.
Credit Counseling
Under the new bankruptcy law which took effect in October of 2005,
those wishing to file bankruptcy must complete an approved credit
counseling course within the six (6) months prior to filing.
Deed in Lieu of Foreclosure
The voluntary surrender of property by an owner/borrower to a lien
holder that eliminates the need to continue foreclosure action by
the lien holder. The lien holder can refuse to accept the Deed in
Lieu and file a Notice of Non Acceptance with the County Recorder.
Discounted Payoff
The payoff of a mortgage loan where the lender accepts an amount
less than the actual amount owed to payoff the loan.
Equity Deficient
A property is Equity Deficient when, if sold, sales proceeds would
not fully pay off existing mortgage debt.
Forbearance Agreement
An agreement between a mortgage holder and a borrower that lays out
a specific loan payment plan and puts a stop on the foreclosure
action so long as the borrower meets the terms of the agreement. The
payment plan includes provisions for repayment to the mortgage
holder of all delinquent interest and fees and could include
extending the life of the mortgage beyond it's original term. A
Forebearance Agreement is a tool that allows the borrower to keep
the property.
Judicial Foreclosure
A foreclosure action conducted through the courts instead of through
a foreclosure trustee. Judicial Foreclosures are very uncommon in
California, particularly on residential properties. Should a lender
elect to pursue a deficiency judgment, it would be through a
Judicial Foreclosure.
Junior Liens
A lien, usually a mortgage loan, that is subordinate to a Senior
Lien, usually a first mortgage. Lien priority is generally
established by order of recordation . NOTE: if you refinance a 1st
mortgage on a property with a 2nd mortgage already in place the new
1st mortgage holder will require a subordination agreement from
Junior Lien holders to legally establish the new mortgage holder as
1st or Senior Position.
LIBOR (London Interbank Offered Rate)
The interest rate charged among banks for short-term Eurodollars
loans - LIBOR is a very common index for adjustable rate mortgages
(ARM).
Loss Mitigation
Home mortgage lenders look to limit losses on delinquent mortgages
by working out solutions with borrowers through their Loss
Mitigation Departments.
Mailing
A copy of the Notice of Trustee’s Sale must be mailed (certified and
first class) at least 20 days before the foreclosure sale to the
borrower and to anyone who was entitled to receive a copy of the
Notice of Default and Secretary of State and IRS, if applicable.
NOD
Short for Notice Of Default.
Notice of Default
An official notice filed and recorded by a designated trustee at the
request of a lender indicating lender has commenced foreclosure
action.
Notice of Trustee Sale
An official notice that is posted, mailed, published/advertised and
recorded by trustee at the direction of lender indicating lender’s
intention to sell the property at public auction. The notice
includes a specific date, time and location.
Posting
A copy of the notice of sale must be posted in a conspicuous place
on the property to be sold at least twenty days before the sale.
Also, a copy of the notice must be posted at one public place in the
city where the property is to be sold at least twenty days before
the sale.
Postponement
Trustee Sales may be postponed by the first at the direction of the
lien holder. Notice may be given in advance or at the time and
location specified for the intended sale.
Private Mortgage Insurance (PMI)
A policy of insurance paid for by the borrower to protect the lender
in the event the borrower defaults on the mortgage. Typically PMI is
required by the mortgage holder when the down payment is less than
20% of the purchase price.
Qualifying Funds
In order to bid at a Trustee Sale bidder must have qualifying funds
available at the sale. Qualifying funds are cash or a cashiers
check(s) drawn by a State or National Bank, a check(s) drawn by a
State or Federal Credit Union or check drawn by a State or Federal
Savings and Loan Association, savings association or savings bank
specified in section 5102 or the Financial Code and authorized to do
business in the State of California.
REO
Short for Real Estate Owned. When a mortgage lender acquires a
property, typically through foreclosure, it becomes real estate
owned – or REO.
Reinstatement
To bring the loan current. Borrower may reinstate up to five (5)
business days before foreclosure sale.
Short Sale
The sale of a home which is completed through negotiation with the
existing lender(s) in which the lender(s) agrees to accept less than
the full amount owed to satisfy the debt allowing the debt to be
‘paid off’, short.
1099-C
IRS Form 1099-c is issued by those cancelling all of part of a debt
to the person receiving debt relief.
Note: The cancelled debt may or may not need to be reported as
income.
Trustee (Foreclosure Trustee)
A Foreclosure Trustee is appointed by the mortgage company when a
mortgage reaches the default status for the purpose of processing
the foreclosure.
Trustee Deed
The deed given to the highest bidder at auction or the foreclosing
lender upon completion of the foreclosure.
Trustee Sale
Conducted by the Trustee. The property is sold at auction to the
highest bidder, or taken back by a foreclosing lender.
|