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Default: If the borrower fails to answer the complaint, the borrower has defaulted in the foreclosure case -- meaning that the lender automatically prevails. The lender is not required to serve the borrower with any further notices as the foreclosure case proceeds through the courts. Defendant: The person or entity who is being sued in court. In the case of a foreclosure proceeding, the defendant is the homeowner who has defaulted on his/her mortgage. Defenses: As part of the answer to the complaint, the borrower includes defenses, or claims that contest the foreclosure. These claims may be based on deficiencies in the foreclosure process (e.g. improper service or lack of standing), or illegalities in the loan itself. Deficiency: After a foreclosed property is sold at auction, the proceeds of the sale go to reimburse the lender and other lien-holders. If the sale price does not sufficiently cover the amount owed, the amount still owed to the lender is called a deficiency. Delinquent: When the borrower initially falls behind on the mortgage (usually 2-3 months), but before the mortgage has defaulted, he/she is said to be "delinquent" on the mortgage. Discovery: The process by which parties gather information through document requests, written questions (called interrogatories), and depositions. Discovery can take a long time. Forbearance: An agreement between the lender and a delinquent borrower wherein the borrower typically pays a lump sum up front, and then enters into a payment plan for the remainder of the arrears. Borrowers need to be cautioned that when they enter into these agreements, they usually waive certain key rights, such as their ability to raise defenses to contest a foreclosure case. Foreclosure:The legal process by which a lender forces a property to be sold, in order to collect on a mortgage loan it claims is owed. |
Foreclosure Glossary of Terms
Part 2 of 5