Accelerate
An option given to lenders through an «acceleration» clause in the mortgage or deed of trust requiring the borrower to pay the entire balance of the loan all at once if their loan is in default. This clause allows your lender to demand that the entire balance of a mortgage or secured loan be repaid in a lump sum under certain circumstances. The acceleration clause can be triggered by a number of circumstances depending where you live and the conditions of your mortgage. For example, in addition to being triggered by a loan falling into default, an acceleration clause can be triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower is late on a monthly payment.

Affidavit
A sworn statement in writing usually given while under oath or in the presence of a notary. In some circumstances, such as if you have to go through a legal action, such as a judicial or non-judicial foreclosure, a written statement is necessary to substantiate stated facts — and act as evidence. For example, you might wish to submit a written statement explaining your mortgage payment history and your point of view about the potential default situation. Such a statement could also come from a third party who has knowledge about the situation. You may need help with composing such a statement. Your attorney may do this for you, or a consumer legal aid agency can help.

Appraisal
The process in which a licensed or authorized person gives an estimate of property value — fair market value. Fair market value is the price a property would sell for on the open market.

Real estate appraisals are provided by real estate brokers or others who have been specifically trained for that purpose. You may want to know the real market value of your property for the purpose of property insurance, selling or leasing your home, contesting a property tax assessment, etc. Your lendor will require an appraisal when you initially get your mortgage, when you buy a piece of property, or when you refinance it. Lendors differ in their requirements. One lendor may require a new appraisal if the previous appraisal is more than a year old, while other lendors might have a 3 year standard. Each lendor generally uses the appraiser of their choice, but the cost will be your responsibility.

Appraisals are based on a number of factors, including, but not limited to the condition of the house, both structurally and visually, the quantity and quality of bedrooms and bathrooms, and the special features of the home, such as a swimming pool, gazebo, etc. Also of concern are the location, access to road and services, and the comparative values of similar sized homes which have been sold recently in the neighborhood.

Appreciation
The difference between the increased value of the property and the original value.

When you sell your home, the increased value of the home will, under certain circumstances, be taxable as a capital gain. You’ll need to see your tax advisor to learn the specifics for both federal and state laws. There are some exceptions to these tax laws, such as exclusions for first time sales, that may save you a lot of money at tax time. If you are considering selling your home, you’ll be wise to investigate these laws prior to selling the home.

When you buy or build a home, you’ll want to be careful to keep good records of all the expenses of improving the property — since these expenses are deductions to the capital gains. These records might be as specific as an accounting computer program to record all expenses, or as simple as a shoe box into which every single receipt goes. Both work!

Assignment
The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).

Legally, an assignment is a transfer of title or ownership interest, as of a lease, bond, note, or bill of exchange; and in real estate, it is a transfer of the entirety of some particular estate or ownership interest in real property.

In the case of a mortgage default, it refers to the transfer of ownership of the property of to certain persons called assignees, who sell the property on behalf of the lendor and those who may hold liens on the property (creditor), and distribute the proceeds to the creditor.

Bid
A «credit bid» is made on behalf of the lender at a foreclosure sale and is must be less than or equal to the balance of the loan in default. The credit bid acts as a minimum bid.

An «upset bid» is a recorded bid placed after a foreclosure sale has ended that is higher than the highest bid received at the actual foreclosure sale. For example, in one state, bidding remains open until 30 days after the actual sale. During that time, an upset bidder may outbid whoever made the highest bid at the actual foreclosure sale.

In some states — not all states — the borrower has the right to reacquire property lost due to a foreclosure. This is called a right of redemption. Any certificate of sale given to the winning bidder at a foreclosure sale does not actually transfer rights until the right of redemption period has expired.

In some states, even after a foreclosure sale, a deficiency judgment can stand against the borrower for the remaining balance on the loan after a foreclosure sale does not pay the full amount due.

Certificate of Sale
A document given to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.

Clear Title
A title that is not burdened with defects.

Credit Bid
A bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan in default.

Decree
A judicial decision.

Deed
A signed document that transfers ownership of property from one party to another.

There are many kinds of deed, each which define a different type of ownership. Your attorney or many consumer websites will help you understand the difference. What the deed accomplishes is to determine the quality of the ownership interest. For example, the title vested by a warranty deed means that the seller guarantees (warrants) certain statements about the property, while the title vested by a quitclaim deed means simply that the seller quits whatever interest he has. If he has no ownership rights to a property, a quitclaim deed signed by him would give you the same ownership interest — none at all!

A special warranty deed guarantees the title only against defects arising during the period of the current ownership of the property and not against defects existing before that time.

A deed of trust involves a third party called a trustee, usually a title insurance company, who acts on behalf of the lender. When you sign a deed of trust, you in effect are giving a trustee title (ownership) of the property, but you hold the rights and privledges to use / live there. The trustee holds the original deed for the property until you repay the loan. Unlike a mortgage, a deed of trust also gives the trustee the right to foreclose on your property without taking you to court first.

Deeds used in relation to a foreclosure proceeding have the effect of transferring ownership of the property to other interested parties. A Deed-in-lieu of Foreclosure is used when borrowers voluntarily convey their rights in a property to the lender. Selling your property, if possible is usually preferable to such a deed, because a deed- in-lieu of foreclosure goes on your credit record and tells all potential creditors that you were unable to meet your financial responsibilities.

Deed-in-lieu of Foreclosure
An instance where borrowers voluntarily convey their rights in a property to the lender.

Deed of Trust
A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The three parties included in a deed of trust are the borrower, lender and trustee.

Default
A mortgage or deed of trust is said to be in default when the borrower fails to make the payments as agreed to in the original promissory note.

Deficiency Judgment
A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.

Equitable Title
The present right to possession with the right to acquire legal title once a preceding condition has been met.

Fair Market Value
The price a property would sell for on the open market.

Foreclosure
The forced sale of property pledged as security for a debt that is in default.

Free & Clear
Ownership of property free of all indebtedness.

Judicial Foreclosure
A foreclosure that is processed by a court action.

Lien
A charge upon real or personal property for the satisfaction of a debt.

Legal Description
A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps.

Lender
A person who lends money for temporary use on condition of repayment with interest (i.e., the bank, mortgage company, etc.).

Lis Pendens
A recorded notice of pending lawsuit.

Mortgage
A written pledge of property that is used as security for the repayment of a loan.

Non-judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A «power of sale» clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default.

Notary
A notary is essential a licensed, official witness. He/she is a public officer licensed by the state to attest to and certify the validity of signatures of others. Often referred to as a notary public.

It’s not hard to become a notary public — because it is not an issue of a lot of legal knowledge. The notary cannot answer your legal questions — they’re only a witness to your signature. You can find a notary to witness your signature in many places, realty offices, banks, title offices, law firms, etc. Sometimes there is a small fee, but often there is no charge, especially if you are a regular customer of the firm, such as your bank, who has an employee who is a notary.

Notice of Sale
A notice giving specific information about the loan in default and the proceedings about to take place. This notice must be recorded with the county where property is located and advertised as stated in the security document or as dictated by state law.

Personal Property
Property other than real property consisting of things temporary or movable.

Posting
To publish, announce or advertise by physically attaching a notice to an object.

Postponement
Postponement means to put off to a later time. In the case of a foreclosure sale, this is generally done by announcement at the original sale or by posting notices establishing the new date and time the foreclosure sale will take place.

Right of Redemption
A borrower’s right to reacquire property lost due to a foreclosure.

Request for Notice
A recorded document requiring a trustee send a copy of a Notice of Default or Notice of Sale concerning a specific deed of trust in foreclosure to the person who filed the document.

Sheriff Sale
In order to pay creditors in a foreclosure proceeding, an auction, (trustee’s sale or sheriff’s sale), may be ordered. The sale is administered by a trustee. The notice of the sale is published in in the manner required by law (often in local newspapers) in the county where the property is located. The trustee also records the notice in the county where the property is located.

The auction may be an oral «open outcry» auction, or bids (offered amounts) may be submitted in writing with a specific deadline for receipt of these bids.

A «credit bid» is made on behalf of the lender at a foreclosure sale and is must be less than or equal to the balance of the loan in default. The credit bid acts as a minimum bid.

An «upset bid» is a recorded bid placed after a foreclosure sale has ended that is higher than the highest bid received at the actual foreclosure sale. For example, in one state, bidding remains open until 30 days after the actual sale. During that time, an upset bidder may outbid whoever made the highest bid at the actual foreclosure sale.

In some states — not all states — the borrower has the right to reacquire property lost due to a foreclosure. This is called a right of redemption. Any certificate of sale given to the winning bidder at a foreclosure sale does not actually transfer rights until the right of redemption period has expired.

In some states, even after a foreclosure sale, a deficiency judgment can stand against the borrower for the remaining balance on the loan after a foreclosure sale does not pay the full amount due.

Subject To
The purchase of a property with an existing lien against the title without assuming any personal liability for the liens payment.

Title
A person’s right in real property and evidence of that right.

The term title refers both to a document, such as a warranty or quitclaim deed, and to the concept of ownership of real property.

Whenever you buy or sell a property, a «title search» is completed by a title attorney. A title search is the process of reviewing the files at your county courthouse to see if any claims (liens) have been made against the property. For example, a roofer who doesn’t get paid would file a «mechanics lien» against your property — a statement that he is owed certain monies for his work, which must be paid before the property can be sold.

Title and Mechanics Lien
Liens can also be filed by the state or federal tax authorities if you don’t pay your taxes. These tax liens are usually payable before all other liens. Certain states allow the tax lien to become such a first lien on the property, which is then turned around and sold at auction as a tax lien certificate.

A lien waiver is a statement that you should have all workmen sign when you pay them, which states that they have been paid in full and cannot apply a lien against your property.

A «clear title» means that there are no claims against the property — no mechanics liens, no unpaid property taxes, etc.

An «equitable title» means that you have only the right to possession, with the right to acquire legal title forthcoming when a particular condition has been met. For example, if you are purchasing a home on an installment contract, then you have the right to obtain real ownership (ie, a warranty deed) once the home is fully paid for. However, if you default on such a contract, you don’t have the usual rights of redemption and other protections afforded by some states.

Trustee
A neutral party who advertises the foreclosure property for sale and conducts the auction to sell said property to the highest bidder.

Trustee Sale
An auction of real property conducted by a trustee. Also known as a Sheriff’s Sale.

Upset Bid
A recorded bid placed after a foreclosure sale has ended that is higher than the highest bid received at the actual foreclosure sale.

Writ
An order or mandatory process in writing issued in the name of a court or judicial officer commanding the person to whom it is directed to perform or refrain from performing a specified act.