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REO/Eviction Terms Defined
Special thanks to USFN's REO/Eviction Committee
for assistance in compiling the following glossary.
* Selected terms have been reproduced from Mortgage
Banking Terms: A Working Glossary, Copyright © 1997 with the
express permission of Mortgage Bankers Association of America (MBA). The
complete version of Mortgage Banking Terms contains over 1500 terms and
is available for purchase through MBA's website (www.campusmba.org).
*Addendum:
An agreement or list that is added to a contract, agreement, or other
document such as a letter of intent. FHA and VA require that an addendum
be added to or incorporated in a sales contract, if it is written prior
to the appraisal. (Courtesy of MBA. Mortgage Banking Terms: A
Working Glossary, 10th Edition. Copyright © 1997.)
Deed in Lieu:
The voluntary conveyance of the property from the borrower to
the lender in lieu of foreclosure. The advantage for the lender is the
cost of acquisition is less than a foreclosure and title is gained
faster. The advantage for the borrower is he avoids a foreclosure and
potential deficiency judgment. (National Mortgage Servicer's Reference Directory,
27h Edition. USFN Copyright © 2001-2011.)
Deed of Trust:
A type of security instrument wherein the borrower conveys
title to a third party (trustee) to be held in trust as security for the
note. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Disclosure:
Information relevant to specific transactions that is required by
law. (Courtesy of MBA. Mortgage Banking Terms: A Working Glossary,
10th Edition. Copyright © 1997.)
Eviction:
The act of forcibly removing an occupant from a property. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
Ejectment:
An action to gain possession of real property. An eviction. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
Foreclosure:
A legal procedure by which mortgaged property is sold upon
default in order to satisfy the debt. Foreclosures are generally
governed by state law and vary from state to state. The two most common
types of foreclosure are “Judicial” and “Power of
Sale.” (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Homeowners Warranty Program:
An insurance program through which participating builders provide
homebuyers with a warranty on the workmanship and materials of a home,
and warrant against major structural defects. (Courtesy of MBA.
Mortgage Banking Terms: A Working Glossary, 10th Edition.
Copyright © 1997.)
*HUD-1 Uniform Settlement
Statement:
Standard form used to disclose costs at closing. All charges
imposed in the transaction, including mortgage broker fees, must be
disclosed separately. (Courtesy of MBA. Mortgage Banking Terms: A
Working Glossary, 10th Edition. Copyright © 1997.)
*Inspection Certificate:
A document verifying that a property is as described. The
inspection is usually performed by a designated agent and may be
accepted in place of a survey. (Courtesy of MBA. Mortgage Banking
Terms: A Working Glossary, 10th Edition. Copyright ©
1997.)
*Legal Description:
A property description, recognized by law, that is sufficient to
locate and identify the property without oral testimony. (Courtesy of
MBA. Mortgage Banking Terms: A Working Glossary, 10th Edition.
Copyright © 1997.)
Mortgage:
A conveyance of an interest in real property given as security
for the payment of a debt. A two-party agreement between the mortgagor
(borrower) and the mortgagee (lender). In some states a mortgage acts as
a conveyance of title. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
Quiet Title:
A proceeding to establish a plaintiff's title to land by
bringing into court an adverse claimant and compelling him to either
establish his claim or be permanently stopped from asserting
it. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Real Estate Owned (REO):
Property a lender acquires as the result of foreclosure. (Courtesy
of MBA. Mortgage Banking Terms: A Working Glossary, 10th
Edition. Copyright © 1997.)
*Real Estate Settlement Procedures Act
(RESPA):
A federal statute and regulation promulgated by HUD governing real
estate lending practices and disclosures. Its main features pertain to
the provision of a good faith estimate of loan settlement costs and the
provision of the HUD settlement booklet within three days of making a
loan application. (Courtesy of MBA. Mortgage Banking Terms: A
Working Glossary, 10th Edition. Copyright © 1997.)
Redemption Period:
The time allowed by law in some states during which a mortgagor
may redeem or buy back its property by paying the amount owed on a
foreclosed mortgage, including interest, costs and fees. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Sales Contract:
A written agreement between buyer and seller stating terms and
conditions of a sale or exchange of property. (Courtesy of MBA.
Mortgage Banking Terms: A Working Glossary, 10th Edition.
Copyright © 1997.)
Sheriff’s Deed:
The deed given by the sheriff that transfers ownership to the
buyer at the foreclosure sale. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
Special Warranty Deed:
A deed in which the grantor conveys title to the grantee and
agrees to protect the grantee against title defects or claims that arose
during the period of time title was held by the grantor. In a Special
Warranty Deed, the grantor guarantees to the grantee that he or she has
done nothing during the time the grantor held title to the property. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Title Insurance Policy:
A contract by which the insurer agrees to pay the insured a
specific amount for any loss caused by defects of title to real estate,
wherein the insured has an interest as purchaser, mortgagee, or
otherwise. (Courtesy of MBA. Mortgage Banking Terms: A Working
Glossary, 10th Edition. Copyright © 1997.)
Title Search:
A review of public records to determine the identity of parties
having an interest in a property and the existence and nature of claims
outstanding against a property. (National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
*Trust Deed:
(See Deed of Trust Above).
Trustee:
A party who holds title to a property for the benefit of
others. In a deed of trust relationship the trustee holds title for the
benefit of the trustor (borrower) and the beneficiary (lender). In the
case of a bankruptcy, the trustee is an individual appointed by the
bankruptcy court to administer the debtor’s case. The trustee is
generally a private citizen. There is a trustee in all Chapter 7, 12,
and 13 cases. A trustee is appointed in some Chapter 11 cases. ( National Mortgage Servicer's Reference Directory,
27th Edition. USFN Copyright © 2001-2011.)
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