Foreclosures are commonplace right now. In fact every thirty seconds another home goes into foreclosure. People are losing their homes because of bad loans, lack of employment and terrible economic situation across the United States. At the same time investors are available to pick up properties cheap and spin some homes to make a quick buck. So it seems everyone is abuzz about foreclosures now. With all this talk around you there are some terms you may or may not be familiar with. These are the most common foreclosure market terms so you can get in on the conversation and know what’s being talked about as well as impress others with your market savvy.
Accelerate
An option lenders have written into a mortgage or trust deed that enables them to require a borrower to pay the entire balance of the loan in one lump sum if the loan goes into default at any time.
Appreciation
The amount of money that a property has increased in value in relation to the original sale price. So the positive difference of the two figures.
Certificate of sale
A legal document presented to the winning bidder of an auctioned property which gives them the right to the property once the previous owner’s redemption period has expired and they haven’t reclaimed their property.
Credit bid
A bid for a lender at an auction which is less than or equal to the balance of the loan in default. This is done by a representative for the lender typically.
Decree
A decision made by a judge. This usually applies to a decision made regarding a loan, title, deed or certificate of sale.
Deed
A document signed by two parties that transfer ownership of a property from one to the other. This is legally binding as long as it has been signed by a notary.
Deed of trust
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A security instrument used to represent the legal title of real property as a placeholder for repayment of a loan in default. This is made between three parties; the borrower, lender and trustee.
Default
When a borrower doesn’t make payments on a loan as outline and agreed upon with the lender in the loan documents.
Equitable title
The right to possession of a property and the legal right to acquire title after a specific condition has been met or satisfied.
Fair market value
The price a property would sell for in the open market at the present time.
Foreclosure
The forced sale of a property whose loan is in default as a means of repayment of that loan.
Free and clear
When a property is without any liens or other encumbrances and ready for ownership.
Lien
The association of a charge upon a property for an debt in default against the borrower. This can be unpaid property taxes, landscaping costs or otherwise.
Lender
The person who provides the money for borrowing (the loan) to the buyer so they can purchase their property with a condition of repayment made with specific time and interest terms.
Notice of sale
A document filed with the county that records all information about the loan in default and the sale about to occur. This usually must also be posted on the property to inform others of the proceedings.
Right of redemption
The right of a borrower to reclaim their property within a specific period of time if they repay the debt owed as agreed upon in their original loan documents.
Subject to
The purchase of a property which has a lien on it but the assumption of no responsibility for the repayment of the said lien on the property.
Title
The document which declares the owner of a property.
Trustee
An outside party who markets an upcoming auction and conducts the sale of property.
Writ
A court order which commands a person to do or not do something. Often used when people start to become destructive with their properties out of anger of losing them.
The foreclosure market is a complicated but interesting business full of possibilities for all parties involved. Understanding the process and terminology will help you avoid foreclosure as well as take advantage of it when someone else falls into misfortune.
Tags:
Foreclosure,
Real Estate,
mortgage
Foreclosure Market Terms | Foreclosures | Mortgage