Covering the Basics

Many victims of foreclosure are initially lost in a sea of unfamiliar words when they begin missing payments and getting letters in the mail from their lender. Sometimes, half the battle to stop foreclosure is simply in understanding some of the terms that explain what is going on in the foreclosure process. Listed below are brief definitions and explanations of a few of the most common terms that apply to foreclosure situations.

acceleration clause

A clause in a mortgage which allows the lender to demand payment of the outstanding loan balance. The most common reason for accelerating a loan is if the borrower defaults on the loan or transfers title to another individual without informing the lender.

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This means that when you miss a payment and go into foreclosure, the lender will begin accelerating interest and fees on the loan. It also means that if the lender accepts a payment, the acceleration will stop, which is why lenders will not usually accept partial payments, or even full payments if you are more than a month behind.

credit history

A record of an individual's repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.

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Once a lender begins reporting your late payments or non-payments to the credit bureaus, your recent credit history will cause your overall score to drop significantly. This is the main reason why it is so difficult to refinance a home out of foreclosure.

eviction crew

Workers who accompany the sheriff on behalf of the lender to assist in the eviction of an occupant from real property. The eviction crew are the workers who will actually move the occupants belongings from the home to the street/yard/driveway/sidewalk and then change the locks to keep the previous occupant from retunring to the home.

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This is the most dangerous occurence in the foreclosure process and marks the end of the line for homeowners who have not found a solution to stop foreclosure. Once the sheriff evicts a homeowner, the only option left is to purchase the home back. Not even selling the property can be considered.

modification

Occasionally, a lender will agree to modify the terms of your mortgage without requiring you to refinance. If any changes are made, it is called a modification.

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Loan or mortgage modification is one of the main options to stop foreclosure, which all homeowners in hardship situations should examine.

quitclaim deed

A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

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Be careful about signing any kind of quitclaim deed. Also note that, simply signing a deed to your home over to someone else does not relieve you of the responsibility of paying your mortgage.

sheriffs sale

Public Auction of a borrower's assets seized in a Foreclosure order obtained from a court, and carried out by a sheriff or other court officer. Assets pledged as loan collateral and secured by attachments, liens, or mortgages may be sold at auction.

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The sheriff sale is one of the more important dates during the foreclosure process. Depending on the state foreclosure law, ownership of a home may be completely transfered after the confirmation of the sale. This is what makes it so important to stop foreclosure before a scheduled sheriff sale date.