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 Real
Estate Foreclosure Terms
A
Appraisal
- An opinion of value.
Assessed Value - Value
placed on property by the County for the purpose of computing real
property taxes.
B
BPO
- Broker's Price Opinion also called a Comparative Market Analysis.
A method of appraisal in which selling prices of similar properties
are used as the basis for arriving at the value estimate. Institutional
sellers usually rely on a BPO prepared by a real estate agent and
a professional appraisal to determine a listing price.
C
Certificate
of Sale - A certificate issued to a buyer at a judicial
sale (e.g. foreclosure)
Certificate of Title
- This certificate is issued to a buyer 10 days after the foreclosure
sale.
Certified Funds - Same
as cash. Buyer's monies must be brought to the closing in this form.
Closing - The final accounting
of the real estate sale. The closing Statement outlines the costs
on both the buyers and the seller's side of the transaction.
Contingent - Dependent
upon conditions or events. There are conditions the institutional
seller will consider in an offer to purchase such as the ability
of the buyer to obtain a mortgage or perform inspections. The sale
of another property to raise sufficient funds is an example of a
contingent usually not considered.
Contract - A promise.
Only when an offer to purchase has been fully executed (signed and
initialed) by buyer and seller does it become a contract.
D
Default
Judgment - Against someone because they failed to
show up in court.
Deficiency Judgment -
Decision requiring a borrower to pay the lender the difference between
the mortgage balance and the amount realized at the foreclosure
sale.
 E
Earnest
Money - An amount of money given with the offer to
purchase as a "good faith" gesture of the buyer's serious
intent. Although not required by law in Florida, most institutional
sellers require a minimum $500-$1000 deposit in a trust account
with an offer.
Escrow - The deposit
of funds with a bonded neutral third party with instructions to
carry out the provisions of a contract. Earnest money deposits are
usually held in the trust accounts of a real estate Broker, title
company or attorney.
F
Fee
Simple - Complete legal ownership of a property.
Federal Housing Administration (FHA)
- Federal agency that administers FHA insured loans.
Federal Tax Lien - An
obligation to the federal government as a result of non-payment
of taxes.
F.N.M.A. - Abbreviation
for the Federal National Mortgage Association affectionately known
as "Fannie Mae", an agency which buys blocks of loans
from banks. Due to its size, Fannie Mae Foreclosures make up a significant
percentage of our Florida inventory.
F.H.L.M.C. - Abbreviation
for the Federal Home Loan Mortgage Corporation affectionately known
as "Freddie Mac", an agency performing a similar function
to Fannie Mae and now much larger. Special financing is offered
on Freddie Mac Foreclosures.
Foreclosure - Forced
sale of property ordered by a lender due to delinquency in mortgage
payments. A foreclosure sale terminates all rights of the mortgagor.
G
G.N.M.A.
- Government National Mortgage Association affectionately known,
as Ginnie Mae is an agency in the secondary mortgage market dealing
primarily in recycling VA and FHA mortgages. Grantee. The buyer.
H
HUD
- Abbreviation for the Department of Housing and Urban Development,
an agency that oversees FHA. FHA foreclosures are called HUD Homes.
I
Institutional
Lender - Financial institutions whose loans are regulated
by law such as banks, credit unions and commercial loan agencies.
Involuntary Lien
- A lien imposed against property without the owner's
consent such as taxes, special assessments, federal income taxes,
etc.
J
Junior
Lien - A lien that does not have first priority making
the property security for payment of a debt.
L
Lien
- An encumbrance using the property as security for the payment
of a debt or obligation of the property owner.
Lis Pendens - Lawsuit
pending. This usually recorded in Florida to give constructive notice
of pending litigation.
M
Mechanic's
Lien - A lien placed
on property by laborers or material suppliers who have contributed
to an improvement.
Mortgage - A legal conveyance
of property to a creditor for security (from the Latin meaning death
pledge).
 Mortgagee
- The lender.
Mortgagor - The borrower.
MLS - Multiple Listing
Services run by local Realtor associations.
N
Notice
of Default - A notice filed to show that the borrower
under a mortgage is in default.
P
Points
- A charge made by the lender for loaning money. One point equals
one percent of the loan.
Portfolio Loan - Loan
originated and held 'in house' as part of a lender's investments.
PMI - Private Mortgage
Insurance required as part of the monthly payment in loans less
than 80% loan to value (less than 20% down payment).
Pre-foreclosure - Period
between when a borrower becomes delinquent and the property is foreclosed
upon.
Principal - A person
acting for him/herself in a transaction. Also the amount of a loan
exclusive of interest.
Q
Qualifying
- Process of demonstrating a person is credit worthy and has enough
money to buy a property. Institutional sellers may require "proof"
in the form of a letter from a lender or some verification of the
source of funds if the sale is cash.
Quiet Title - Legal process
to eliminate title problems.
Quitclaim - A form of
deed in which the grantor is giving the grantee rights to a property
but makes no warranties about rights others may have.
R
Realtor
- A broker or sales agent who is a member of a local real estate
board affiliated with the National Association of Realtors.
R.E.O. - An abbreviation
for Real Estate Owned most commonly used to describe properties
acquired in foreclosure and owned by institutions.
Right of Redemption -
Right to buy a property back for a limited period of time (usually
10 days) after a foreclosure sale.
S
Secondary
Mortgage Market - Fannie Mae, Freddie Mac, Ginnie
Mae were originally chartered by the federal government to stimulate
the economy by either buying or recycling packages of loans from
financial institutions.
Sheriff's Deed - Deed
given by court order to satisfy a judgment.
Short Sale - In some
instances in Florida a lender may agree to adjust the amount owed
in order to get the property sold.
 Special
Warranty Deed - See warranty deed. "Special"
indicates there are limitations.
T
Title
- Evidence that an owner is in lawful possession; instrument evidencing
ownership.
Title Insurance - Policy
written by a title company to protect a property owner against loss
if the title is imperfect.
Title Search - Process
to determine validity of the title to real estate.
W
Warranty
Deed - Assures the title conveyed is good and possession
will be undisturbed.
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