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 Adjustable Rate Mortgage:
Often referred to as an "ARM". A mortgage loan with an interest rate that can vary up or down, or adjust, at certain time periods and within certain interest rate limits. An ARM interest rate adjustment has been a major cause of foreclosures in the United States.
Attorney Bankruptcy Services:
The bankruptcy division of Foster Law Offices. For more information on Attorney Bankruptcy Services, please visit www.attorneybankruptcy.net.
Automatic Stay:
This function of the bankruptcy laws stops all collection actions, subject to certain exceptions, upon the filing of a petition in bankruptcy. While the automatic stay goes into effect upon a bankruptcy filing, it is important to notify foreclosing creditors immediately as the notice from the bankruptcy court can take up to 10 days to reach a lender/creditor. For more information on the automatic stay, please visit www.attorneybankruptcy.net.
Bankruptcy:
A series of federal laws that allow individuals and businesses to eliminate or reorganize debt. Bankruptcy laws permit individuals and businesses to immediately halt collection actions, including foreclosure sales upon the filing of a bankruptcy petition in the United States Bankruptcy Court.
Bankruptcy Trustee:
The individual appointed by the bankruptcy court to administer a bankruptcy case. In a Chapter 7, the bankruptcy trustee reviews information, liquidates assets and pursues legal actions on behalf of the bankruptcy court. In a Chapter 13 bankruptcy, the trustee "confirms" the Chapter 13 plan, collects payments and initiates legal actions on behalf of the bankruptcy court.
Borrower:
In the context of foreclosure, the borrower is the individual who executed the home loan. The borrower is entitled to receive all notices required under the deed of trust act.
Chapter 7 bankruptcy.
A Chapter 7 bankruptcy is a type of bankruptcy where an individual or business makes disclosures regarding his or her assets, liabilities, income, expenses and financial affairs in the United States Bankruptcy Court. If the individual qualifies for Chapter 7, he or she is granted a discharge from any future obligations to repay certain debts. If the individual maintains non-exempt assets (such as home equity exceeding $125k, stocks, bonds, etc), such non-exempt assets are sold by the bankruptcy trustee to repay creditors. For more information on Chapter 7 bankruptcy, please visit www.attorneybankruptcy.net.
Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is a type of bankruptcy where an individual may reorganize his or her financial affairs by paying a monthly payment to the bankruptcy court for a period of 36-60 months. A Chapter 13 bankruptcy may allow an individual to save an asset, such as a home or car, from foreclosure or repossession. For more information on Chapter 13 bankruptcy, please visit www.attorneybankruptcy.net.
Deed in Lieu of Foreclosure:
A deed given by a borrower to a lender in satisfaction of the borrower's loan obligations. The deed in lieu of foreclosure benefits the lender by saving the money and time it takes to foreclose. The borrower may benefit by negotiating a deficiency judgment waiver and, possibly, the payment of the borrower's moving expenses by the lender.
Deed of Trust:
A document signed and delivered to a lender that gives a trustee the right to foreclose on a property in the event the borrower fails to make loan payments. When foreclosing on a deed of trust, the trustee need not file a formal lawsuit. Rather the foreclosure is undertaken through a series of notices and publications.
Default:
In the context of foreclosure, a default is the failure of a borrower to make a mortgage payment called for under the terms of a home loan. Once the borrower is in default, the trustee may begin foreclosure proceedings against the borrower/homeowner.
Deficiency Judgment:
A judgment obtained by a 2nd or other junior lienholder who is not paid in full for a homeowner's loan obligations from the proceeds of a foreclosure auction. In order for a lender to obtain a deficiency judgment, the lender must initiate a formal lawsuit against the homeowner in a court of competent jurisdiction.
Equity:
The difference between all loans, taxes, assessments, dues and other liens/encumbrances and the value of the home. For example, if a home is encumbered with a $200,000 mortgage and $10,000 is owed in taxes and the home is worth $400,000 then the equity in the property is $190,000.
Eviction:
The process by which a tenant is legally removed from a rental property. In order to evict a tenant, the landlord must file a lawsuit and obtain a court order authorizing the sheriff to forcibly remove the tenant. In the context of foreclosure, the homeowner may be evicted by the new purchaser if the homeowner does not vacate the home within 20 days of the foreclosure sale.
Foreclosure:
The series of steps required by law to transfer the ownership of the property to satisfy a debt. With a deed of trust, there are two possible foreclosure processes, judicial and non-judicial. The judicial foreclosure process involves filing a lawsuit in state court, seeking a money judgment for the amount owed and an order permitting the sale of the property at auction. The non-judicial process involves the recording of a notice of default at the County recorder's office, posting the Notice of Default on the property and mailing it to anyone with an interest in the property, publishing and posting a public notice of the foreclosure sale, and then holding an auction sale at the place, date and time set for the sale set forth in the Notice of Default.
Foreclosure Title Report:
A foreclosure title report is obtained in connection with the non-judicial foreclosure process. It shows who owns the property, the legal description of the property, the liens against the property, and the names and addresses of the persons entitled to notice of the foreclosure.
Foster Law Offices:
A downtown Seattle, Washington law firm. For more information on Foster Law Offices, please visit www.fosterlawoffices.com.
Hard Money Loan:
A hard money loan is a home loan made by a non-traditional lender that features a high interest rate and short loan term. Typically, a hard money lender requires an LTV of 70% or lower and the loan.
Homestead Exemption:
Located at RCW 6.13.030, a homestead exemption allows Washington homeowners to protect $125,000 in home equity from creditors seeking to foreclose on an individual's primary residence.
Lender:
In the context of foreclosure, the lender is the individual or entity who loaned the money to the borrower to purchase the home. The lender is also the party who notifies the trustee of any default under the terms of the home loan.
Lien:
An interest in property to secure the payment of a debt or performance of a credit obligation. If the owner of the property does not satisfy the debt or perform the obligation, the individual or entity to whom the debt or obligation is owed, and who holds the lien interest, may foreclose the lien and take the property to sell to pay the debt or obligation. Liens may be non-consensual (meaning the property owner did not consent to have the lien attach to the property) such as a judgment lien or tax lien, or consensual (the owner did consent) such as a mortgage or deed of trust.
Loan to Value (LTV):
A ratio utilized by lenders and underwriters to determine whether a loan may be extended to a homeowner. For example, if a homeowner seeks a $100,000 loan on a property appraised at $200,000 the LTV is 50%.
Mechanic's Lien:
A lien against a property filed by a contractor to secure payment of improvements such as remodels, repairs or improvements. Not unlike a mortgage or tax lien, a mechanic's lien must be satisfied in order to close the sale of the property.
Mortgage:
Instrument in writing, duly executed and delivered, that creates a lien on real estate as security for the repayment of a home loan. The traditional mortgage requires a lender to initiate a formal legal action in the form of a lawsuit to recover the property from a homeowner. Compare deed of trust.
Navigation Real Estate:
A residential real estate firm located in Seattle Washington specializing in the marketing and sale of properties facing foreclosure. Navigation features an experienced bankruptcy attorney broker and real estate agents experienced in all aspects of foreclosure. For more information on Navigation Real Estate, please visit www.navigationre.com.
Notice of Default:
The legal document that is recorded in the County Recorder's Office that is the first step in the foreclosure process, thereby giving notice to all that the property is in foreclosure. The Notice of Default must contain information about the deed of trust being foreclosed, the legal description and street address of the property, and the date, time and place of the foreclosure sale auction. The Notice of Default must also be mailed to all persons with an interest in the property that might be affected by the foreclosure, and delivered to the occupant of the property or posted on the property. In the state of Washington, the borrower has 30 days to pay mortgage arrears after receiving the Notice of Default.
Notice of Sale:
In the event a borrower is unable to pay the mortgage arrears within 30 days of receiving the Notice of Default, the lender will deliver a Notice of Sale. The Notice of Sale gives the borrower notice that in no less than 90 days that the property will be sold at foreclosure auction.
Payoff:
The option to pay in full the debt secured by the deed of trust, including the entire principal balance, accrued interest, late fees, foreclosure fees and costs, etc. This not only stops the foreclosure, but also gives the owner of the property the right to have the deed of trust reconveyed or removed from the title for the property.
Predatory Lending:
The practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against.
Real Estate Owned (REO):
A property that is "purchased" by the lender at a foreclosure sale and resold by the lender through a real estate broker. For more information on REO properties, please visit www.navigationre.com.
Reinstatement:
The option to cure the payment default that gave rise to the foreclosure by paying the sum of the payments in default, any late charges, fees and costs for the foreclosure, and any other advances made by the beneficiary pursuant to the terms of the deed of trust, such as taxes and insurance on the property. Reinstatement stops the foreclosure process, at least for the first two times that the deed of trust is in foreclosure, and assuming that there are no other defaults involved, such as a due on sale clause violation.
Short Sale:
A sale of real estate where the purchase price is insufficient to pay all liens and encumbrances on the home. For more information on short sales, please visit www.navigationre.com.
Trustee:
In the context of a foreclosure, the individual or entity identified in the deed of trust authorized to initiate foreclosure proceedings and sell the property at foreclosure sale and to utilize the proceeds of the sale to repay lender and refund any surplus proceeds back to the borrower.
Trustee Sale/ Foreclosure Auction:
The public sale of a property in foreclosure that results after all notices and publications have been undertaken by the foreclosure trustee. A foreclosure auction may take place at the courthouse in the county where the property is located or at the foreclosure trustee's offices. The lender will set a minimum bid at which the property may be purchased. While the homeowner facing foreclosure may attend and bid on his or her property, the homeowner must pay cash for the repurchase of the property.
 More Information
To find out more about avoiding foreclosure, feel free to contact us with your questions. We can be reached by phone at: (206) 442-9500 (Toll-free: 1-800-206-6122).
To receive a free consultation regarding your (or your friend or family member’s) debt problems, please contact us today.
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