A copy of the Notice of Trustee Sale must be published once a week for three weeks.
A dated and signed letter from the borrower/seller to the lender authorizing the lender to discuss personal information with the seller’s real estate professional. The letter includes agent’s name and contact information, your property address, loan reference number and your contact information.
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’.
Often called debt reorganization, a Chapter 13 Bankruptcy is generally appropriate for those individuals who have a non-exempt property they wish to retain and who have enough income to reasonably pay the reorganized debt after covering reasonable living expenses.
The beneficiary in a foreclosure context is generally the mortgage lender. Frequently referred to as the ‘Benny’.
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.
The final step in the sale of the property where all required documents are signed, funds are disbursed and keys to the property are transferred to the new owner. In some cases, both the buyer and seller (and their representatives) will meet together, perhaps with an attorney or other settlement official as required by state law. A “split” closing/settlement can occur in some cases, where the buyer and seller complete document signing at separate locations.
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.
Occurs when the borrower does not meet its legal obligations according to the loan terms.
The payoff of a mortgage loan where the lender accepts an amount less than the actual amount owed to pay off the loan.
The portion of a property’s value that is owned by the homeowner. A homeowner’s equity is determined by subtracting the amount of any remaining mortgage(s) owed to lenders from the property’s fair market value.
A property is Equity Deficient when, if sold, sales proceeds would not fully pay off existing mortgage debt.
Spreadsheet that indicates all household income, less all household expenses. Often savings and other assets are indicated as well. Documents to support the calculations may be required, such as bank statements, savings accounts, investments, cash, or receipts and invoices from copies of late bills, various papers to pawned items.
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 its original term. A Forbearance Agreement is a tool that allows the borrower to keep the property.
A letter submitted to a lender (as part of a short-sale package) indicating the precise reasons why the borrower can no longer afford to make mortgage payments.
A foreclosure action conducted through the courts instead of through a foreclosure trustee. Should a lender elect to pursue a deficiency judgment, it would be through a Judicial Foreclosure.
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.
Lender-Approved Short Sale
Conducting a short sale with the lender agreeing to accept the proceeds of the sale and “forgive” the remaining amount of mortgage owed.
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).
Process where original terms of mortgage are changed, such as reduction of interest rate, or how adjustable rate is calculated, principal reduction, reduction of late fees or penalties, change in loan term (usually longer), cap monthly payment as percentage of household income.
Home mortgage lenders look to limit losses on delinquent mortgages by working out
solutions with borrowers through their Loss Mitigation Departments.
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.
Notice of Election and Demand (NED)
A notice recorded by the public trustee after receiving the foreclosure documents from the lender’s attorneys, scheduling a public auction of the property 110-125 days in the future.
Notice of Default (NOD)
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.
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.
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.
In order to bid at a Trustee Sale bidder must have qualifying funds available at the sale. Qualifying funds are cash or a cashier’s 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.
Short for Real Estate Owned. When a mortgage lender acquires a property, typically through foreclosure, it becomes real estate owned – or REO.
To bring the loan current. Borrower may reinstate up to five (5) business days before foreclosure sale.
The sale of a property 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 and allowing the debt to be ‘paid off’, short.
Short Sale Package
Forms and instructions provided by a lender to a borrower interested in winning the lender’s approval for a short sale. Also, the collection of documents including financial statements, hardship letter, sales contract, etc., submitted to a lender as a request for short-sale approval.
IRS Form 1099-c is issued by those canceling all of part of a debt to the person receiving debt relief.
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.
The deed given to the highest bidder at auction, or the foreclosing lender, upon completion of the foreclosure.
Conducted by the Trustee. The property is sold at auction to the highest bidder, or taken back by a foreclosing lender.
When the mortgage loan balance is greater than the property’s value.