RE Finance Unit 13: Loan Defaults and Foreclosures Flashcards
Acceleration
The clause in a mortgage or trust deed that stipulates the entire debt is due immediately if the mortgagor defaults under the terms of the contract.
Auction
Selling property to the highest bidder.
Crunch Down
Recasting an existing loan to a lower level to avoid a foreclosure.
Deed in Lieu of Foreclosure
Voluntarily signing over to the creditor the property pledged as collateral on a defaulted loan.
Default
Nonperformance of a duty; failure to meet an obligation when due.
Deficiency Judgment
A personal judgment levied against the mortgagor, under the terms of the note, when a mortgage foreclosure sale does not produce sufficient funds to repay the mortgagee the outstanding loan balance, interest, and cost.
Delinquency
Late payments or nonpayments of principal, interest, taxes, or insurance.
Equitable Redemption Period
A period of time established by custom, usually six months, that allows a defaulting borrower to redeem property by bringing all payments current before foreclosure.
Eviction
Legally dispossessing occupants of real property for unlawful detainer.
Forbearance
The postponement for a limited time of a portion or all of the payments on a loan in jeopardy of foreclosure.
Forclosure
Court action initiated by a lender for the purpose of recovering the borrower’s real estate to pay the balance owed on a defaulted loan.
Grace Period
A time allowed, usually 15 days, for making late payments without a penalty being imposed.
Judgement Decree
Specifies the awards granted by the court in a civil case.
Judicial Foreclosure
A court procedure utilized by lenders to secure clear title to a property under a defaulted real estate loan.
Late Payment Charge
Penalty imposed for late payments.
Lis Pendens
Indicates that a lawsuit is in process.
Moratorium
A temporary suspension of payments due under a financing agreement in order to help a distressed borrower recover and avoid a default and foreclosure.
Notice of Default
In junior finance, where the borrower gives the senior lender permission to notify the junior lender in the event of a default.
Power-of-Sale
The lender’s attorney’s authority to confess a judgment without process to speed a foreclosure.
Recast
A redesign of an existing loan balance into a new loan for the same period or longer to reduce payments and help a distressed borrower.
Reinstate
In delinquent deeds of trust, the time prior to exercising the power of sale in which the errant borrower may bring the loan current.
Statutory Redemption Period
Legislated redemption period allowing borrower time to redeem defaulted property.
Strict Forfeiture
Under a land contract, enables a lender to foreclose in as little as 30 days when the defaulting borrower has less than 20% equity.
Trustee’s Deed
In a foreclosure, the deed given by the trustee under a deed of trust to the successful bidder at the auction.
