Foreclosure Glossary of Terms | Lizarraga Law Firm, PLLC

Practice Areas / Foreclosure Defense and Loan Modifications / Foreclosure Defense / Glossary of Terms

Judgment of Foreclosure and Sale: Once signed by a judge, this legal order gives the lender permission to sell the property through a referee, and confirms the total amount owed by the borrower to the lender.

Lien / Lien holder: A lien is a legal claim placed on a property as security to repay a debt. For example, if a homeowner does not pay his/her property taxes, the city can place a lien on the property for the amount owed. In New York City, these tax liens are typically sold to private entities, which can lead to foreclosure. The entity that owns the lien on the property is called the lien holder.

Lis pendens: Literally meaning, "suit pending" in Latin, lis pendens is a filing with the county clerk that indicates to the public that the property's ownership is being disputed. This notice formally begins the foreclosure process.

Loan Modification: An agreement between the lender and the borrower wherein one or more of the original terms of the mortgage is changed in order to make the mortgage more affordable to the borrower. As with forbearance agreements, borrowers who agree to loan modifications usually waive many key rights, such as their ability to raise defenses to contest a foreclosure case. This option, as well as other loss mitigation options, may have tax consequences.

Loss Mitigation: The process by which a lender and borrower who is behind on his/her mortgage attempt to negotiate a deal that is mutually agreeable to both parties. Some possible avenues of loss mitigation include: loan modification, forbearance, short sale, and deed-in-lieu of foreclosure. The earlier the borrower pursues loss mitigation the better, since negotiating a workable deal also becomes more and more difficult as time passes and arrears accumulate. Loss mitigation becomes more difficult when the borrower has multiple mortgages. For example, the borrower may be able to negotiate a loan modification for one loan that is sustainable and affordable. However, if the borrower is also in default on a second mortgage, and the lender is not willing to negotiate, this second lender may still initiate a foreclosure case against the borrower.

Motion: legal term for a formal request to the court to take action in a case.

Mortgage Default: After a delinquent borrower's loan is accelerated by the lender, he/she is said to be in default.

Notice of Appearance: If the borrower does not have any defenses or counter-claims to contest the foreclosure, but still wants to be served with all legal papers during the course of the foreclosure case, he/she can file a Notice of Appearance with the court. A copy of the Notice of Appearance must also be sent to the lender's attorney.