Appraisal – An opinion of value.

Assignment of Deed of Trust: a written document that transfers the beneficial interest in a note and deed of trust from one to another.

Assessed Value – Value placed on property by the County for the purpose of computing real property taxes.

Authorization to Sign as Agent Agreement: written document given by a beneficiary authorizing an agent to sign a document on their behalf (such as a notice of default).

Bankruptcy: a legal proceeding which allows a debtor to discharge certain debts or obligations without paying the full amount or allows the debtor time to reorganize his financial affairs so he can fully repay his debts. (A bankruptcy does not discharge obligations secured by a deed of trust.)

Beneficiary: the lender or their successor in interest for whose benefit a trust is created and to whom the debt is owed.

Bid Authorization Letter: your written authorization instructing the trustee to make the initial opening bid at the trustee’s sale on the lender’s behalf. This form will also advise our office of any additional amounts to be included in the opening bid, (total Debt), such as funds advanced by you to pay delinquent real estate taxes, etc.

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 subject properties present day value Institutional sellers usually rely on a BPO prepared by a real estate agent and a professional appraisal to determine a listing price.

Breach: the failure without legal excuse to perform any promise made in a contract. A breach is stated in the notice of default.

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.

Declaration of Default: a written document that instructs the trustee to prepare and record a notice of default and if necessary, to sell the secured property in order to satisfy the unpaid obligation. This document does not require the acknowledgment of a notary public or recording and is merely retained by the trustee in their foreclosure file.

Deed of Trust: a written document, describing the real property that is being given as security for the repayment of an obligation.
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.

Earnest Money – An amount of money given with the offer to purchase as a “good faith” gesture of the buyer’s serious intent and/or for liquidated damages 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.

Extension Agreement: an agreement (normally written) giving additional time to pay an obligation.

Eviction: See “Unlawful Detainer.”

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.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.

HUD – Abbreviation for the Department of Housing and Urban Development, an agency that oversees FHA. FHA foreclosures are called HUD Homes.

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.

Junior Lien – A lien that does not have first priority making the property security for payment of a debt.

Lien – An encumbrance using the property as security for the payment of a debt or obligation of the property owner.

Limited Power Of Attorney: a recorded document which authorizes someone to act as attorney-in-fact in a specific manner for someone else.

Lis Pendens – Lawsuit pending. This usually recorded in Florida to give constructive notice of pending litigation.

Mechanic’s Lien – A lien placed on property by laborers or material suppliers who have contributed to an improvement.

Modification Agreement: a written document, signed by the beneficiary and the borrower that alters the terms of either the note of deed of trust.

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.

NOTE: a written document, (promise to pay), that sets forth the amount of the obligation and the terms of repayment.

Notice of Default – A notice filed to show that the borrower under a mortgage is in default.

Notice of Rescission: a written document that cancels or annuls the effect of a notice of default when a default has been cured (reinstated). This document does not require the acknowledgment of a notary public, but must be recorded with the county recorder in the county in which the property is located.

Notice of Trustee’s Sale: a written document that sets forth the day, date and time of the trustee’s sale, describes the property to be sold and gives an estimate of the unpaid debt as of the first publication debt. This document is prepared by the trustee and does not require the acknowledgment of a notary public and must be recorded with the county recorder in the county in which the property is located at least 14 days prior to the scheduled sale date. We must arrange for the notice of trustee’s sale to be published in a qualified newspaper in the city (or judicial district), in which the property is located. This publication must appear for 3 consecutive weeks, with the first publication date being at least 20 days prior to the sale date.

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.

Postponement: a verbal announcement made at the time and place of the scheduled trustee’s sale that establishes a new date or time for the trustee’s sale. The sale cannot be changed from the originally noticed location.

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.

Preliminary Injunction: A judicial order granted by a judge of the Superior Court, which prohibits the trustee from proceeding with any further action on a specific foreclosure file until a trial is held or settlement reached. This occurs when there is a dispute between the owner of a property and the beneficiary. A Trustee’s Sale cannot be held any sooner than seven (7) days from the dismissal of the action or the expiration of a restraining order, injunction or stay from any court of competent jurisdiction. However, the order or any amendment thereto may expressly provide for an earlier sale date.

Principal – A person acting for him/herself in a transaction. Also the amount of a loan exclusive of interest.

Promissory Note: See “Note.”

Publication Letter: this letter is sent to the lender by the trustee. When completed and returned, it authorizes the trustee to proceed with the scheduling of the trustee’s sale and preparation of the notice of trustee’s sale.

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.

Realtor – A broker or sales agent who is a member of a local real estate board affiliated with the National Association of Realtors.

Reconveyance: a recorded document which gives notice that the loan secured by the identified deed of trust has been paid in full.

Reinstatement: a curing of a default and restoration of the loan to current status through payment of past-due amounts together with the fee and expenses of the trustee.
Reinstatement Period: this is the interval from the date the notice of default is recorded until five business days prior to the date of sale during which time a default may be reinstated/cured.

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.

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.

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.

Unlawful Detainer Action (eviction): a legal action to remove someone who has unjustly retained possession of real property after one’s right to possess has terminated.

Void: having no legal force or binding effect. Incurable.

Voidable: a condition capable of being made void, although not necessarily void in itself.

Warranty Deed – Assures the title conveyed is good and possession will be undisturbed.