FORECLOSURE GLOSSARY
Foreclosure: The legal process by which a creditor with a claim on real estate forces a sale of the property.
Deed in lieu of foreclosure: An arrangement that
allows the homeowner to turn over the deed of the house, stopping the
foreclosure process and canceling the mortgage debt.
Forbearance: A temporary suspension in payments
allowed by the lender for a period usually no longer than a few months.
Sometimes offered if the borrower has lost his job but has prospects for
a new one in the near future. The payments have to be made up later.
Modification: A change in the mortgage terms. Most
common modification is a temporary reduction in the interest rate to
reduce the payment amount.
Notice of default: A legal notice from the lender giving the homeowner a set period of time to make up past payments.
Reinstating a mortgage: Bringing a mortgage back in compliance by catching up missed payments and paying late fees and interest.
Repayment plan: Usually, a plan that allows the homeowner to make up missed payments over time.
Short sale: An arrangement between the homeowner and
the lender that allows the owner to get out from under a mortgage by
selling the home for less than is owed on the mortgage. The lender
agrees to the amount, and the mortgage is canceled.
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