Loan Satisfaction, Assumption, and Defaults

Question 1

Default

Answer 1

Breach of one or more of the terms and conditions that the borrower agreed to in the loan and security agreements

Question 2

Delinquincy

Answer 2

The state of past due payment

Question 3

Foreclosure

Answer 3

Procedure that removes an owner’s property rights; when real property is pledged as security for a loan, the process of selling that property as a result of the borrower’s default is called foreclosure

Question 4

Loan Servicer

Answer 4

One who collects payments from the borrower and passes them along to the investor for a fee; may be separated from the sale of the loan or may be included

Question 5

Novation

Answer 5

A formal assumption in which a new borrower is substituted for the original maker of the note