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For Homeowners Facing Foreclosure

The ULTIMATE Guide To

AVOIDING
FORECLOSURE
PART 1

25 Essential Foreclosure Terms & Definitions

Authored By: Redstone Law Group, LLC

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PART 1

Glossary of 25 Essential
Foreclosure Terms &
Definitions

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Understanding Foreclosure Terminology: Before fighting home
foreclosure, it can be helpful to understand the commonly used terms
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The
most certain way to succeed is always to try
just one more time
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Edison

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Foreclosure
Terms & Definitions 1-5
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The foreclosure process may be stopped once the
automatic stay goes into effect, but it may not stop foreclosure indefinitely
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Deed in Lieu of Foreclosure – A deed in lieu of foreclosure (sometimes
referred to as a mortgage release) may be an option for avoiding foreclosure
whereby a homeowner negotiates with his or her mortgage lender to accept
the deed of the home in exchange for release from mortgage debt obligation
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Deed of Trust – A deed of trust usually refers to a kind of deed whereby
interest in a homeowner or borrower’s property is transferred to a trustee to
be held as security for a debt between a borrower and a lender
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Default – A default in finance is often the failure to fulfill a legal obligation to
repay a loan or debt
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Deficiency – A deficiency or deficiency balance is typically the remaining
amount that is owed and due to a lender after the collateral (real estate or
personal property) has been sold or transferred for less than the outstanding
balance on the loan
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Deficiency Judgment – A deficiency judgment can be a court order making a
homeowner personally liable for the remaining debt when a home is sold or
transferred for less than the outstanding loan balance
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Dual Tracking – Dual tracking often refers to a prohibited practice wherein a
mortgage lender actively considers a homeowner for a loan modification
while simultaneously moving forward with the foreclosure process
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Foreclosure – Foreclosure is usually a legal procedure mortgage servicers
may initiate after one or more delinquent payments to recover a mortgaged
property
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Judicial Foreclosure – A judicial foreclosure is typically a type of foreclosure
whereby mortgage lenders are required to go to court in order to initiate the
foreclosure process
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Lis Pendens (LIS) – A lis pendens is often a written notification of a pending
lawsuit
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The lis pendens is
usually filed during the PRE-foreclosure process
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Loan Modification - A loan modification (sometimes referred to as a
mortgage modification) may be an option for avoiding foreclosure whereby
the original terms of a mortgage agreement may be permanently modified in
order to make the loan more affordable for a homeowner
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12
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A mortgage forbearance typically works by negotiating
with mortgage lenders to temporarily suspend the foreclosure process while
the homeowner tries to bring the deficient loan current
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Mortgage Servicer – A mortgage servicer is usually a company (in many cases
a bank) which is responsible for processing loan payments, responding to
borrower inquiries, keeping track of principal and interest paid and may
initiate foreclosure in the event of a default
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The settlement established improved servicing standards
(like the prohibition of dual tracking) and provided relief to distressed
borrowers
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Nonjudicial Foreclosure – A nonjudicial foreclosure often refers to a type of
foreclosure whereby mortgage lenders may initiate the foreclosure process
without going to court or filing a lawsuit
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Notice of Default (NOD) – A notice of default is often one of the first
documents in a non-judicial foreclosure filed by the trustee to initiate the
foreclosure process
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17
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The Notice of Sale typically
outlines the location, time and date for the auction of a home in foreclosure
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Notice of Trustee’s Sale (NTS) – A notice of trustee’s sale is typically a written
document which may be mailed, advertised or posted outlining the date,
time and location of a Trustee’s sale with a description of the property to be
sold
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Postponement – A postponement (sometimes referred to as sale date
postponement) may be able to delay a foreclosure sale in order to provide
homeowners with some valuable extra time before the final foreclosure
auction
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Foreclosure
Terms & Definitions 21-25
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This
may result in a deficiency judgment, but can be helpful for avoiding the
negative effects of foreclosure
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Robosigning – Robosigning was an illegal practice bank employees utilized to
sign thousands of documents and affidavits used to foreclose on
homeowners without verifying the information contained in the document or
affidavit
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Underwater Mortgage – An underwater mortgage may occur when the
outstanding balance on a mortgage loan is greater than the fair market value
for the home
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As a result, homeowners may unknowingly become financially responsible for
unpaid property taxes, utility bills, maintenance costs and more
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DISCLAIMER OF ADVERTISING

Redstone Law Group, LLC does not practice law in every state or
jurisdiction
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The foregoing is not, and is not
intended to constitute, any form of legal advice or recommendation
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There is no substitute for
personal consultation with appropriate counsel of one’s choice
admitted to practice law in one’s own jurisdiction
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RedstoneLaw

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