A letter from your lender, sent after you have stopped paying, stating that the whole amount of your mortgage is due immediately.
Adjustable-Rate Mortgage (ARM)
A mortgage or home equity loan in which your interest rate and monthly payments may change periodically during the life of the loan, based on the fluctuation of an index. Lenders may charge a lower interest rate for the initial period of the loan. Most ARMs have a rate cap that limits the amount the interest rate can change, both in an adjustment period and over the life of the loan. Also called a variable-rate mortgage.
A written response to the Complaint, in which a homeowner lists all of their defenses to the foreclosure, as well as raises any counterclaims they may have against the Bank.
Appraisal or Appraised Value
The professional opinion of a licensed and independent Appraiser about the value of your home. The Appraiser visits the home, evaluates its interior and exterior condition, and compares the property to other homes recently sold in the area.
Broker Price Opinion (BPO)
The estimated value of your property as determined by a Real Estate Broker, firm or other qualified individual.
The Agent who represents the buyer in a real estate transaction.
Buyer's Closing Costs (BCCs)
The costs that a seller may pay on behalf of a buyer. Non-recurring costs are one-time costs such as escrow, title insurance and loan fees. Recurring costs are those that do not end, such as property taxes and/or insurance.
Used to bring a loan in default current by adding delinquent and unpaid interest, fees and/or escrow advances to the unpaid principal balance of the loan.
Depending upon your financial situation and at the investor's discretion, a cash contribution or promissory note for future payment may be requested. A contribution does not always imply that the remaining deficiency will be waived.
Certificate of Occupancy (CO)
A document issued by a local jurisdiction certifying that all building codes have been met and that your home has been properly inspected.
A title that is marketable and free of liens or legal questions regarding ownership of the property.
A written document that is filed with the Court and tells you and the Court the reasons the Bank is suing you and what they are asking the Court to do. Because this is a foreclosure, the Bank is claiming you have not made your monthly payments as required by your Mortgage and Note.
Cooperative Short Sale program
This program may help you avoid foreclosure if you owe more on your mortgage than your house is worth and do not qualify for the Home Affordable Foreclosure Alternatives (HAFA) program. It also offers relocation assistance to help with moving expenses.
Deed in Lieu of Foreclosure or Deed in Lieu
Used as an alternative to foreclosure, a deed in lieu of foreclosure is where you sign over the deed to your property to the lender because you are unable to make your mortgage payments. May also be referred to as deed in lieu or 'voluntary conveyance.' A deed in lieu of foreclosure will have a negative impact on your credit.
If you are unable to keep your payments up to date or meet the other terms of your loan outlined in your mortgage loan documents, your loan is considered to be in default.
Deferment (also known as Forbearance)
If you are facing a temporary hardship, your lender may offer you a deferment. A deferment is a postponement of your home loan payments for a set period of time. This does not release you from having to pay interest on those amounts, but you can defer or postpone having to make those payments for an agreed-upon number of months as temporary relief during a hardship period. After that period is over, your lender will work with you to develop a repayment plan that allows you to make your regularly scheduled mortgage payments plus pay off these deferred payments over time.
The amount a borrower owes to the lender after the sale of the property at a foreclosure sale in the event the property is sold for less than the amount of the debt owed.
A delinquency cycle is the time between you missing your first mortgage payment and the foreclosure of your home. Being in the “delinquency cycle” does not automatically mean you’ll lose your home to foreclosure. This is a crucial time to reach out and get help. The sooner you take action by contacting your bank, the more options you’ll have available to you.
Failure to make payments on time.
As part of the federal government's Dodd-Frank Wall Street Reform and Consumer Protection Act, put into effect September 2010, this certification helps prevent criminal abuse of the government's Making Home Affordable (MHA) program.
The certification confirms that none of the borrowers listed on the home loan has been convicted within the past 10 years of any of the following in connection with a mortgage or real estate transaction:
felony larceny, theft, fraud or forgery
money laundering or
This is where your lender collects part of your mortgage payment in a special account to pay your taxes and insurance premiums when they become due. The amount in this account is based on the estimated amount necessary to pay these obligations each year.
If you’re experiencing a temporary hardship and are less than 90 days behind on your home loan payments, you may be eligible for an extension. An extension is where your lender agrees to suspend a number of your home loan payments for a period of time and add those payments to the back end of your loan – extending the length of your loan term. To be considered for an extension, you must be able to show that you have the ability to make future payments.
Fair Market Value (FMV)
The likely selling price of a home between a willing buyer and a willing seller on the open market. The Fair Market Value is usually determined by an Appraiser for a new mortgage or home equity loan. For a short sale, a specialist works on behalf of the investor to get the best possible fair market value.
Federal Housing Administration (FHA)
The Federal Housing Administration (FHA) is a U.S. government agency that insures mortgages to provide options to low and moderate income home buyers that may not be available through conventional financing.
A home loan with a predetermined fixed interest rate for the entire term of the loan.
A temporary agreement between you and your lender to postpone your loan payments for a set period of time during a temporary hardship. Acceptable hardships may vary from case to case and can include job loss, illness, divorce, etc. At the end of the postponement, you can choose to pay the overdue payments with a one-time payment, add the past due amount to the back-end of your mortgage, or increase the amount of your monthly mortgage payments until the past due amount is repaid.
A legal procedure where a lender sells a property securing a mortgage loan at a public auction or sale to repay a borrower's defaulted loan. Foreclosure proceedings typically begin after you have made no payments for 60 days or more. If there are no successful third party bidders at the foreclosure auction, title to the property will be transferred to the lender, which may then market and sell the property (known as an REO property) to recover its losses on the loan.
A letter to your lender that explains the circumstances behind your inability to pay your monthly home loan payments.Your lender will request this letter if you seek a short sale, or wish to refinance or modify your loan.
Home Affordable Foreclosure Alternatives (HAFA)
Part of the Federal Government’s Making Home Affordable (MHA) program, the Home Affordable Foreclosure Alternatives (HAFA) program was developed to give homeowners a way to settle their mortgage debt without going through a foreclosure. The program offers a streamlined method for selling your home in a short sale. If you’re unable to sell your home in a short sale, the program also offers a deed in lieu option. Under the HAFA program, homeowners that sell their home in a short sale or sign it over in a deed in lieu are offered incentives to help them with relocation.
Home Affordable Modification Program (HAMP)
Part of the Federal Government’s Making Home Affordable (MHA) program and backed by government incentives, the Home Affordable Modification program offers loan modifications that help create affordable and sustainable monthly mortgage payments. All modifications begin on a trial basis but are made permanent after you successfully make trial period payments over a 3-month period and provide all required documentation that supports eligibility for the program.
Home Affordable Modification Program Government Monitoring Data Form
This form helps the federal government monitor compliance with federal statutes that prohibit discrimination in housing.
Home Affordable Refinance Program (HARP)
Part of the Federal Government’s Making Home Affordable (MHA) program, the Home Affordable Refinance program was developed to help you if you’re having trouble keeping current on your mortgage payments and don’t qualify for a traditional refinance. The Home Affordable Refinance program allows borrowers who qualify to refinance their loans even when the market value of the home is lower than the mortgage amount owed on the home.
Home Affordable Second Lien Modification Program
Part of the federal government’s Making Home Affordable program, this program may help you arrange more affordable payments if you’re having trouble making home equity loan or line of credit payments (also known as a second lien, second mortgage, HELOC or HELOAN). To participate, you must first successfully complete the Trial Period Plan of your first mortgage, and have the modification of your first mortgage under the Home Affordable Modification Program made permanent.
Home Affordable Unemployment Program (UP)
Part of the federal government’s Making Home Affordable program, this program is designed to help homeowners who are unemployed. If you are currently unemployed and having difficulty making your home loan payments, you may qualify for a period of suspended payments, depending upon the type of loan you have, while you look for new employment.
Home depreciation is a drop in the value of your property for any reason (home deterioration or damage, market conditions, weak economy, etc.).
Home Equity Line of Credit (HELOC)
A line of credit secured by the equity in a borrower's residence. It can be used for home improvements, debt consolidation, and other major purchases or expenses. At closing, a credit limit is established. In most cases, the borrower can access the line of credit by a variety of access devices, such as convenience checks, debit cards, and credit cards. A Home Equity Line of Credit is a type of a second mortgage.
Home Equity Loan
A loan secured by the equity in a borrower's residence. It can be used for home improvements, debt consolidation, and other major purchases or expenses. On the funding date, all of the principal is advanced for the benefit of the borrower(s). A Home Equity Loan is generally a type of a second mortgage.
Keeping your home in the face of foreclosure is home retention. Home retention options generally involve loan modifications, forbearance or deferment, and repayment plans. Asking for home retention help when you first recognize an inability to make your mortgage payments is the best strategy to try to keep your home.
HOPE for Homeowners
The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments and are at risk of foreclosure but can afford a new loan insured by HUD's Federal Housing Administration (FHA).
When a borrower is current on their mortgage loan but is at risk of not being able to continue paying the monthly home loan payments due to financial hardship.
The person or institution that owns the mortgages or mortgage-backed securities, providing the funds that the homeowner is able to borrow to purchase a property. Many loans have multiple investors, and each investor can set different policies regarding available remedies for loans in default.
If you choose to sell your home for less than what is owed on the mortgage in a short sale, your loan servicer must obtain approval from the owner of your mortgage.The investor will make a 'yes' or 'no' decision that Bank of America is legally obligated to follow.
The legal claim a creditor has to a property that is used as collateral or security for repayment of a debt. All outstanding liens must be paid before ownership of a property can be transferred from one party to another.
A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county clerk’s office. Recording a Lis Pendens alerts a potential purchaser or lender that the property’s title is in question, which makes the property less attractive to a buyer or lender.
The licensed Real Estate Agent who works with a homeowner to list the property for sale, market the property, and solicit offers to buy the property.
A loan modification is a change to the original terms of your loan. Loan modifications could include lowering your interest rate, extending the term or maturity date of the loan, moving from an adjustable to a fixed-rate loan, deferring some portion of the unpaid principal balance to the end of the loan, and/or forgiving some portion of the unpaid principal balance. See Stage 6
Loss mitigation is the process of you and your lender working together to come up with a solution for avoiding foreclosure when possible. Includes home retention options as well as short sale or deed in lieu of foreclosure.
Marketability refers to the “sale-ability” of your home. The marketability of your house is based on its location, size, condition and the condition of the local housing market in general.
A loan modification is a change to the original terms of your loan. Loan modifications could include lowering your interest rate, extending the term or maturity date of the loan, moving you from an adjustable to a fixed-rate loan, deferring some portion of the unpaid principal balance to the end of the loan, and/or forgiving some portion of the unpaid principal balance.
Mortgage Insurance (MI)
A type of insurance that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Also known as private mortgage insurance or PMI. A short sale will often require the mortgage insurer’s approval.
A written document that is a promise to pay. Typically, when you borrow a large sum of money from a lender, you pay it back with interest, in monthly installments, over a period of years. All these loan terms are found in the loan’s note.
Notice of Appearance
Formal notification by a party to a court (and to parties already involved in a case) that it wishes to participate in the litigation process.
Order of Reference
A document presented by the Bank to the Court, which allows the foreclosure proceeding to continue in the Court system if a Settlement Conference has been unsuccessful. An Order of Reference would appoint a Referee to determine how much you owe the Bank.
A partial claim is a no-interest or low-interest loan given to you by a lender to help you pay back any missing or partial mortgage payments and default-related fees. This is a one-time only loan. The partial claim loan is paid back when your mortgage loan is paid off.
Appearing in a court proceeding for oneself - without an attorney representing them.
A person authorized by law to deliver papers, typically the Summons and Complaint, to the Defendant.
A comparison of the last appraisal with a current broker price opinion (BPO) to update the current market value of a property. Once received, this value is good for up to 90 days and supersedes the original appraisal for marketing purposes.
The redemption period takes place after foreclosure sale of a home in certain states where a homeowner cannot be removed or evicted from their home. This provides the homeowner additional time to pay off the loan in full to avoid foreclosure.
Paying off your existing loan with the proceeds from a new loan in order to take advantage of lower interest rates and other more favorable loan terms.
If you are behind on your payments, your lender may agree to a repayment plan that allows you to make your regularly scheduled mortgage payments, plus pay off a portion of the past due amounts over time
Request for Approval of Short Sale (RASS)
A letter your loan servicer provides that contains guidelines for applying to the HAFA (Home Affordable Foreclosure Alternatives) program.
Request for Mortgage Assistance Form
For homeowners whose loans are not owned by Fannie Mae or Freddie Mac, this form provides information to your mortgage servicer about your home and financial situation. It also describes the documents you will need to provide to complete your application. All of the borrowers listed on the mortgage must sign the request form.
Second Mortgage / Second Lien
The traditional term for a home equity loan or line of credit because it is generally not the first or primary lien on the title, which usually is made to purchase the home.
If you can no longer afford to make your mortgage payments and your house is worth less than you owe, a short sale allows you to sell your house at the current fair market value. You then have the option to move to a more affordable situation. Because the proceeds from the sale may not pay off all that you owe, the investor or owner of your loan must approve the sale. Depending on your situation, you may be eligible for a deficiency waiver. In that case, you will not be required to repay any remaining loan balance after the sale.
When putting your house on the market, the goal is to market and sell your house for an amount greater than any and all outstanding liens against the property. Liens include all mortgages, escrows and fees on the property. For further clarification on liens and related restrictions, please contact a licensed real estate agent.
Short Sale Notice
A Short Sale Notice is a document that you’ll receive from us after we’ve evaluated your property for the Home Affordable Foreclosure Alternatives Program (HAFA). It lists the acceptable fair market value of your home.
Short Sale Approval Letter
The physical letter issued after the investor agrees to the terms that will permit the short sale of your house.
A legal document that notifies a party that a legal proceeding has been started.
Tax Information Form (IRS Form 4506-T)
This form allows an individual, or an outside third party such as your bank, to verify tax information reported on a federal income tax return for one or more years. IRS Form 4506-T adds convenience by giving you one piece of paper to sign and return as opposed to collecting years of tax documents, making copies and sending those in.
A temporary hardship is a situation where you experience a loss of income but the circumstances have an end in sight, such as a medical condition that temporarily prevents you from working or a natural disaster.
Traditional Short Sale Process
The process followed when an offer has been received prior to obtaining permission to pursue a short sale.
Trial Period Plan Notice
A Trial Period Plan Notice is a letter that outlines the terms and the amount of your Trial Period Plan mortgage payments for the Home Affordable Modification Program.
Uniform Borrower Assistance Form
For homeowners whose loans are owned by Fannie Mae or Freddie Mac, this form provides information to your mortgage servicer about your home and financial situation. It also describes the documents you will need to provide to complete your application.
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