Foreclosure Terms
- Auction or Trustee Sale (NTS):
After the property owner has defaulted on the mortgage, the property is sold by the lender to the highest bidder at a public sale.
- Forbearance:
Arranging a temporary freeze on your mortgage payments.
- Foreclosure:
A legal process that involves extinguishing the rights of the owner in order to sell the property to satisfy a lien, which is usually a mortgage on the property that is in default.
- HUD Foreclosure:
An auction of homes whose loans were guaranteed by the U.S. Department of Housing. There's an Offer Period, during which sealed bids are accepted from your agent. HUD will generally accept the highest bid, or the bid that brings them the highest net.
- Lieu of Foreclosure:
(walking away) from your property however you must follow up with the lender to insure your name gets taken off the title report.
- Notice of Default:
A written document that gives constructive notice of a property owner's failure to pay the mortgage.
- Notice of Rescission:
A written document that cancels or annuls the effect of a notice of default when a default has been reinstated.
- Redemption Period:
A period of time where the property owner can buy back their property after it's sold at auction. Not all states offer a redemption period. California does not off a redemption period.
- REO (Real Estate Owned):
If the property is not sold at auction, it becomes 'real estate owned' by the lender or bank. Real Estate Owned sales are usually handled by real estate brokers.
