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Pre-Foreclosure- the period beginning with initial mortgage default up to when a distressed property is sold. The length of which is considered Pre-Foreclosure and varies depending on state laws. NOD-short for a notice of default. This is an official notice from the lender that the borrower has defaulted on the mortgage. The notice formally begins the foreclosure process. The notice of default also outlines the reinstatement. Reinstatement Period- the time stipulated in the notice of default in which the borrower may reinstate the loan, making required payments and bringing the account and a good standing. Short Sale- A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses. A short sale can also be the best option for a homeowners who are "upside down" on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially. Notice of sale-if, after receiving the notice of default, the borrower does not reinstate the loan, the notice of sale is recorded. The notice of sale explains when and where the foreclosure sale will be held. Foreclosure sale-also known as the sheriff's auction or trustee sale, is when the property is auctioned for sale to the highest bidder. Redemption Period- the amount of time that the distressed owner has to redeem the real estate after the foreclosure sale. Redemption typically requires that the owner pay the sales price, interest, and other costs. Not all states provide redemption. REO-the acronym for real estate-owned. REO as the status of a property when a foreclosure sale is not successful and when ownership of the property is transferred involuntarily to the lender. The U.S. government has expanded the Home Affordable Modification Program (HAMP) to include incentives for servicers offering options to eligible homeowners in default wishing to avoid foreclosure. The new program is called Home Affordable Foreclosure Alternatives (HAFA). The HAFA program is set to begin on April 5, 2010 and all HAFA agreements must be finalized and signed by December 31, 2012. As with any real estate transaction, it is highly recommended that you seek both legal and tax advice from qualified professionals.
Anthony Phillips is a Las Vegas Realtor and has received his National Association of REALTORS® Short Sales and Foreclosure Resource certification and the Executive Financial Management certification from Cornell University.
For more information on this topic, please visit:
www.mylvhomesales.com
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