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Commonly Used Short Sale Terms
- Short Sale – This is when your lender/bank agrees to take less than the total amount owed on your house, allowing the debt to be paid off short.
- REO (Real Estate Owned) – When a lender takes a property back, usually through foreclosure.
- NED (Notice of Election and Demand) – The process through which the borrower is given notice as part of the procedural requirements of a foreclosure where the lender has determined to foreclose on the property provided as collateral as opposed to some other remedy.
- Power of Sale Clause – A clause in a mortgage that permits the mortgagee to sell the property. Which secures the mortgage loan in the event that mortgage payments are not made in a timely manner.
- Public Trustee – A government agent that acts as a trustee for purposes of effectuating a foreclosure sale.
- Non-Judicial foreclosure – A foreclosure process that does not involve court action. This method is typically used in title theory state in which a trustee or other party effectuates a foreclosure sale.
- Deed of Trust – In a title theory state, the document that transfers legal title to the property to the lender pending full repayment of the loan obligation. The document gives a lender the right to foreclose on the property if the borrower defaults on the loan.
- Statutory right of redemption – A legal right afforded to foreclosed borrowers that gives them the post-foreclosure right to reclaim foreclosed property after the foreclosure sale upon the payment of all defaulted amounts, costs and fees.
- Intent to redeem – A notice to lender, trustee, sheriff or other party that has conducted the foreclosure sale, which the party that has been foreclosed upon intends to exercise their statutory right of redemption and reclaim the foreclosed property. This will usually require the payment in full of the loan obligation and any foreclosure costs.
- Deficiency judgment – Imposition of personal liability on a borrower for the unpaid balance of mortgage debt after a foreclosure has failed to yield the full amount of the debt which was due and owing at the time of the foreclosure.
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