| Arrearage and Arrears |
Money which is not paid on time, as for example, if a borrower
has not made the last two (2) mortgage payments, he or she is said
to be in arrears. |
| Bankruptcy |
A court action declaring a person temporarily free from most
debt due to their inability to pay the debt. When a person is
judicially declared bankrupt, his or her estate is administered
under the bankruptcy laws for the benefit of his or her creditors. |
| Conventional Loan |
A loan made in which real estate serves as the security without
any government agency either insuring (FHA) or guaranteeing (VA) the
loan. Most lenders limit the amount they will lend on a conventional
loan to no more than eighty percent (80%) of value unless private
mortgage insurance (PMI) is carried. |
| Creditor |
The person to whom a debt is owed. |
| Deed |
A document transferring the title (ownership rights) of real
estate. |
| Equity |
The percentage of the total value of the house that the
homeowner actually owns. |
| Federal Housing Administration (FHA) |
A branch of the U.S. Department of Housing and Urban Development
(HUD) that insures mortgages made by FHA—approved lenders on real
estate that meets FHA minimum standards. |
| FHA Loan |
A loan insured by the FHA. An FHA loan requires a one-time
mortgage insurance premium (MIP) of 3.8% of the loan amount which
may be added to the amount of the loan and thus included in the
payments. FHA sets limits as to the maximum loan origination fee
charged by the lender. |
| First Mortgage |
The mortgage that was filed in public records before any others
that are currently outstanding and so takes priority. It is usually
the largest debt on the property. |
| Forbearance |
Holding off on exercising one’s rights such as the right to
foreclose. |
| Forbearance Agreement |
A payment plan worked out with the lender in which the arrearage
is spread out over six to eighteen (6 to 18) months depending upon
the type of hardship and the borrower’s ability to pay. |
| Foreclosure |
Action taken by the lender to take ownership of a house. |
| Foreclosure Counselor |
The individual trained to help people to get their homes out of
foreclosure. |
| Loan |
A contractual agreement from a lender to finance property. |
| Loan-to-value Ratio (LTV) |
The relationship between the amount of money borrowed and the
appraised value of the property. An $80,000 loan on property
appraised at $100,000 would be an eighty percent (80%) LTV. |
| Mitigation Liaison |
The person responsible for getting the remainder of the
paperwork in and all the paperwork sent to Mitigation. |
| Mortgagee |
The lender on a mortgage. |
| Mortgagor |
The borrower on a mortgage. |
| Repayment Plan |
A process used by lenders in which the borrower agrees to pay a
set amount in addition to the monthly payment until the arrears are
handled. |
| Second Mortgage |
A mortgage that is second in priority. |
| Sheriff’s Sale |
A forced sale of property the proceeds of which are used to
satisfy the unpaid claims of the debtor. The resulting document is
called a Sheriff’s Deed. |
| Veterans Administration Loan |
A means of financing real estate by qualified vaterans (someone
who has served in the military). |
