This occurs when the person with a right or interest in a property gives up that right or interest voluntarily, either by physically leaving the property or by showing the intention of giving up that right or interest
Similar to a Schedule to an Agreement of Purchase and Sale; an
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addition to a document that forms part of it
A term of mortgage that lets the creditor to demand payment in full due to the sale of the property
Suggests that the purchaser is buying the property in its current condition
This is a property owned by a bank or a lender. This happens when a borrower fails to make the mortgage payments and the property goes to a foreclosure auction. If the property is not sold, it is repossessed by the bank/lender. This is also known as real estate owned (REO).
CERTIFICATE OF INSURANCE:
Is a document that a real estate property’s insurance company sends to the property’s owners as proof that the company has been insured. The same document also sets the terms and conditions under the insurance coverage.
CERTIFICATE OF TITLE:
Is a document that a real estate property owner shows to prove that he owns the property mentioned in the document.
Means that a real estate property’s title is free of other claims and other such encumbrances and that the property mentioned can be sold.
Refers to the date when the deal was closed, the purchase expenses paid, and the new title registered.
Refers to a loan that has been safeguarded with a document declaring the indebtedness of the borrower and has for a secondary safeguard a mortgage listed against the possession involved.
Refers to "Conditional Sales Contract", which means that a sale has only been made following the execution of certain conditions in the agreement.
In judicial foreclosures, this is the document that describes why the lender is foreclosing. This document is served on the borrower along with a summons. It begins the foreclosure action.
Declaration of Default:
In deed of trust states (non-judicial foreclosure), this is a document that tells a trustee to prepare and record a Notice of Default and sell the foreclosed property at auction.
Deed in Lieu:
This is the document that allows a borrower to give ownership of a foreclosed property to the lender as a way of satisfying the unpaid loan to avoid foreclosure.
Deed of Trust:
A document that transfers ownership of a property from the borrower to a trustee until the borrower has paid the loan to fully buy the property.
Deed of Trust States:
This term describes the U.S. states (non-judicial states) that use deeds of trust to secure a loan.
The term given to the borrower being sued in a foreclosure action.
In some cases a lender can go to court after the completion of the foreclosure process to sue the borrower if the payoff is less than the debt owed. (e.g., Borrower owes $250,000, but property sells for only $200,000).
Refers to a possession that is going to be used to pay off the unpaid sum involved in a mortgage.
EARNEST MONEY DEPOSIT:
In order to close a purchase transaction, a sum of money is to be paid by a potential purchaser that will serve as guarantee of the intention to buy. It is usually the Listing Agent who holds this amount in trust and it will be credited then to the Purchaser off the purchase price. This amount may be forfeited if the Purchaser does not complete the transaction.
An owner’s right of one parcel of land to utilize a part of or all of another person’s land for a particular purpose. It runs with the land. One property is required to be in the dominant position (enjoys the advantage of the easement) while another property will have to be in a servient position (which subjects to the right).
A condition wherein legal rights, benefits, consideration, documents, money, or other valuables are transferred to a new party ahead of that party's legal claim to them, basing on the legal claim that will arise at a specific time in the future. Also a form of trust.
FAIR MARKET VALUE:
An item’s value as determined by a consideration of the amount an independent buyer would disburse to an independent seller for the item under an absolutely free transaction.
A registered mortgage that comes first in line with the property and will give the lender higher privilege to the proceeds when the property is sold over the other, later claimants.
The registered legal claim which takes precedence over others in order to benefit from the earnings from a sale of the property. Usually liens are directed according to registration or time; however, different statutes will let some liens like realty taxes to come first.
An enforcement process wherein the lender under a defaulted mortgage acquires title of the property for the intentions of selling it to regain money owed while under the mortgage.
FREE AND CLEAR:
A tangential description of title to property that is subject to no opposing claims.
A person who possesses a freehold interest in a property.
This is the legal process a lender uses to take a property from a borrower for non-payment of the loan. Foreclosure rules vary from state to state. Some states (generally states that use mortgages vs. deed of trust states) require lenders to go to court; others don't. In either case, the lender takes the foreclosed property to sell to make its money back.
The actual sale of the foreclosed property, usually on the courthouse steps in the county where the property is located. In judicial foreclosures, a “referee” is named by the court to hold the sale. The referee then turns the foreclosed property over to the new owner by Referee’s Deed (see Referee’s Deed below).
In deed of trust states, this is a document the trustee uses to release a property back to the borrower after the loan is paid.
A lien or claim that includes all of the properties owned by a debtor, not just to a specific property. It can be in any form of judgment that a lender can get which attaches all of the debtors’ properties rather than just a specific one.
It is an insurance that protects a property owner against damage caused by fires, storms, earthquakes, and other natural calamities, provided that the calamities or events is covered within the policy.
HOME OWNERS INSURANCE:
It is the coverage for damages incurred by homeowners on their real estate properties
A way in which two or more people may hold title to property together.
A general lien which applies to all property owned by a judgment debtor
Judgment of Foreclosure Sale:
In judicial foreclosures, this is a court document that tells the referee to sell a foreclosed property at auction. It also sets the total amount the borrower owes to the lender. This amount covers the unpaid loan, interest and legal fees.
When a borrower fails to pay the mortgage for several months, the lender seeks to foreclose on the property by filing a civil lawsuit against the borrower and serving the borrower with a formal summons and foreclosure complaint. This begins the judicial foreclosure process, which is handled through the local court system. The court appoints a referee to conduct the foreclosure auction on the courthouse steps.
JUNIOR LIEN (MORTGAGE):
A claim against property which is behind at least one other lien in priority
Lien (see Lien, below) filed at the county clerk's office after the deed of trust or mortgage. Liens may be judgments, unpaid taxes, or second and third mortgages. What makes them “junior” is the fact that they are “second” to the primary mortgage.
A lien is any legal claim upon a property that reveals either a debt or a non-monetary interest in the property. Liens are typically recorded with the clerk of the county in which the property is located.
Lis Pendens (LIS):
Also known as notice of pendency, “lis pendens” is Latin for “suit pending.” In judicial foreclosures, this is a “notice to the world” of a foreclosure action. It is filed with the county clerk.
Foreclosure Glossary (M-Z)