Debt Glossary
Commission
An amount, usually a percentage of a price that is collected by a
professional such as a mortgage broker, foreclosure consultant etc.
Conventional Loan
A private sector loan that is not guaranteed or insured by the U.S.
government.
Credit Score
A set of numbers from different venders (TransUnion, Equifax, Experian)
which is used to determine the credit worthiness of a borrower.
Debt
Money that is owed from a loan on an item such as a mortgage, car loan,
credit cards, student loans, medical debt, etc.
Debt to Income Ratio
Is where your gross income will be compared against your
essential/nonessential expenses as a way of determining if you can
afford a loan on the item you seek.
Deed
A document that transfers property ownership.
Deed Of Trust
A document that conveys legal title of property to a neutral third
party in cause a borrower defaults on loan.
Default
The inability to pay monthly mortgage payments as outlined in the terms
or agreement.
Delinquent
Failure to make timely payments on a loan as outlined in a loan
agreement.
Equity
The market value of a property above the debt owed against it.
Fair Market Value
The highest price a seller can expect to receive from a property sale
at current market conditions.
Foreclosure
A legal process in which a lending institution uses forceful tactics to
take possession of a residential or commercial property.
Foreclosure/Loss Mitigation Counselor
A person who is usually hired to help another person navigate through
programs in order to avoid losing their home to foreclosure.
Grace Period
A extra time given to a borrower after the due date of a loan to avoid
penalties.
Homeowner
One who either owns a home outright or is paying a mortgage towards
ownership.
Investor
An investor is any party that comes in with the intent to make a
purchase on something like a piece of property with intentions to
possibly rent out or resale the property later.
Judgment
A legal decision that requires repayment of a loan and at times can be
secured with collateral such as a piece of property.
Judicial Foreclosure
A foreclosure process that is handled by a judge in a courtroom.
Lien
A claim on a debtor’s commercial or residential property as security
for payment of a debt.
Line Of Credit
Money that is usually made available by a lender to a borrower.
Liquidate
To convert assets to cash.
Loan
Money that is usually borrowed with a specific goal in mind and then
repaid with interest etc.
Loan Servicing
The task of having to collect from a borrower monthly payments,
insurance, tax compounds, delinquencies, mortgage releases and
prepayments.
Loss Mitigation
A process designed to save your home from a possible foreclosure.
Mortgage
A lien that is placed on property as security for repayment of borrowed
money.
Mortgage Broker/Loan Officer
A person who brings together borrowers and lenders.
Mortgage Company
A company or firm that specializes in marketing and making real estate
loans and then selling them off to investors.
Mortgage Insurance
A monthly payment paid by a borrower for mortgage insurance (can be or
not be included as part of the mortgage).
Non-judicial Foreclosure
A foreclosure process that does not take place in a courtroom with a
judge.
Notice Of Default
A written document that gives notice to a homeowner who has failed to
perform his or her obligations.
Notice Of Sale
A notice giving information about a loan in default and the proceedings
that will take place.
Offer
An indication that a potential borrower is willing to purchase a piece
of property at a specific price and is usually in the form of a written
document (contract).
Principal
The amount that is actually borrowed before finance and other charges
are added to the loan.
Redemption Period
A time to redeem or take back possession of a property after it has
been sold.
Real Estate Agent
An individual who is licensed to negotiate and arrange real estate
(land and/or house) sales.
Refinance
To pay off an existing mortgage and replace with a new mortgage.
Reserve
Money set aside for a specific use such as to cover a down payment on a
home and closing cost.
Second Mortgage
To take out another mortgage on a property that already has a first
mortgage.
Self-Employed
A person who owns and usually operates his or her own business in an
attempt to make a profit.
Short Sale
The sale of property at fair market value that’s usually lower than the
amount owed on a mortgage loan.
Trustee
A person who holds property in trust for another to secure the payment
of a debt.
Trustee Sale
The public auction of real property in order to satisfy an unpaid
mortgage obligation.
Underwriting
Analyzing a financial package to determine risk and to see if an
individual qualifies for assistance.
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