Glossary

Facing foreclosure is a scary idea. Part of what makes foreclosure so tough is dealing with many different complicated terms used by lenders, bankers, mortgage companies, and lawyers. We've provided a glossary of terms to help you through the maze of language that surrounds foreclosure issues.

Answer

The written response to a foreclosure lawsuit that is filed by the borrower. This must be filed no more than 28 days after the borrower receives the Complaint in the mail. The Court will usually let the borrower have extra time to file the Answer.

Complaint

The papers that the lender must file with the Court of Common Pleas to initiate the foreclosure lawsuit.

Deed-in-Lieu

This is when the borrower agrees to give the house back to the bank. This can happen before or after the foreclosure lawsuit is filed. This means that the bank won't have to fight in Court for the house and the borrower can stay in the house until a predetermined time. Usually, after a deed-in-lieu has been signed, the borrower owes nothing else to the bank.

Default

This happens when the borrower ignores the foreclosure Complaint. Once the 28 days pass and the borrower does not file the written Answer, the bank asks the Court to give them judgment against the borrower.

Foreclosure

When a lender sues a borrower in Court because the borrower hasn't paid his monthly mortgage payment. The lender is seeking to have the Sheriff sell the house at a public auction.

Loan Workout

Another term for Modification Agreement.

Modification Agreement

When the bank agrees to change the terms of the loan to enable the borrower to stay in the loan.

Predatory Lending

Describes what happens when a loan officer or other person who has influence over the borrower at the signing of the loan knows (or should know): That the borrower will be unable to repay the loan as it is written; That the loan will only benefit the person arranging the loan, not the borrower; or When the loan contains some hidden term or fee that the borrower doesn't know about, and wouldn't normally agree to, and that term or fee ends up causing the borrower to default on their loan payments.

Servicer

The company (usually not the lender) who receives the borrower's monthly payments and who calls the borrower if the payment is late. This can be the company that files the foreclosure Complaint.

Sheriff's Sale

This happens at the very end of the foreclosure lawsuit (usually 12 to 18 months after it was filed). This auction is a public event. Anyone can bid on the house being sold. But, the bank itself has the right to (and almost always does) bid on the property for the purpose of raising the price.

Stay of Confirmation of Sheriff's Sale

8 days after the Sheriff's Sale takes place, the Court's Magistrate will "confirm" the sale (which is a fancy way of saying that they approve of the sale itself). However, if you need the extra time to help you move out of the house, you can file a "Motion to Stay the Confirmation of Sheriff's Sale" with the Court to get an additional 30 days.