Glossary of Real Estate Terms

1. 1099-C: A tax form issued by the lender when the mortgage debt has been cancelled.
Appraisal: A document that provides an estimate of a property’s fair market value based on the
sales of comparable homes in the area and the features of a property.
Beneficiary: One of the parties to a deed of trust. The beneficiary is the lender.
Broker Price Opinion (BPO): The estimated value of a property as determined by a real estate
broker or other qualified individual or firm. A broker price opinion is based on the characteristics
of the property being considered.
Cash Contribution: In some cases, the homeowner is required to make a financial contribution to
the investor in order for the short sale to close and/or to avoid a deficiency judgment. Whether
or not a cash contribution will be required is determined based on the homeowner’s financial
situation and hardship (or lack thereof), the number of lien holders on the property or whether or
not the home is an investment property.
Client Service Representative (CSR): A representative of Cogburn Law Offices, responsible for
communicating with short sale clients and collecting necessary financial documents to be
supplied to the lender.
Closing Coordinator: A representative of Cogburn Law Offices, responsible for finalizing all short
sale transactions with the client by collecting all necessary signatures, making sure that there is an
accepted offer and bank approval and confirming that escrow is open with the title company.
Deed In Lieu: A deed in lieu is when the property is deeded back to the lender with the approval
of the borrower, prior to foreclosure. This process may still have a negative impact on the
borrower’s credit.
Deed of Trust: A deed of trust is a legal document that gives a lender a security interest in your
home. This means that if you don't repay your loan, the lender can foreclose on your home.
Default: Default results when the mortgage holder is unable to make monthly mortgage
payments or otherwise comply with mortgage terms. Once in default, the lender can exercise its
legal rights defined in the contract to begin foreclosure proceedings.
Deficiency: The difference between the outstanding balance on a mortgage note and the fair
market value of a piece of property.
Glossary of Real Estate Terms
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2. Glossary of Real Estate Terms
Deficiency Judgment: Personal claim against the debtor when the sale of the foreclosed
property does not yield sufficient proceeds to pay off the mortgages, accrued interest, legal fees,
etc.
Election/Waiver of Mediation Form: Eligible homeowners of owner-occupied homes who
receive a foreclosure notice, formally titled Notice of Default (or Breach) and Election to Sell, have
30 days after being served with a foreclosure notice to elect participation in the mediation
program by filling out this form.
Fannie Mae: The Federal National Mortgage Association (FNMA) is a federally chartered
enterprise owned by private stockholders that purchases residential mortgages and converts
them into securities for sale to investors.
FHA (Federal Housing Administration): Established in 1934 to assist homebuyers by providing
mortgage insurance to lenders to cover most losses that may occur when a borrower defaults.
Forbearance Plan: A forbearance plan is a loss mitigation option that allows the borrower to
modify the terms of the loan to allow the borrower to afford to stay in the home.
Foreclosure: A legal process in which mortgaged property is sold to pay the loan of the borrower
in default.
Foreclosure Mediation Program (FMP): The State of Nevada Foreclosure Mediation Program is
available for homeowners of owner-occupied homes who receive a foreclosure notice, formally
titled Notice of Default (or Breach) and Election to Sell. Homeowners have 30 days after being
served with a foreclosure notice to elect participation in the mediation program to meet with the
lender and a neutral mediator to discuss alternatives to foreclosure.
Freddie Mac: The Federal Home Loan Mortgage Corporation (FHLM) is a federally chartered
corporation that purchases residential mortgages, securitizes them, and sells them to investors,
providing lenders with funds for new homebuyers.
Hardship Letter: A letter required by the lender to approve short sale and loan modification
transactions, which outlines the homeowner’s hardship that resulted in an inability to continue
making mortgage payments.
Home Affordable Foreclosure Alternatives (HAFA): A federal short sale program that was
established to assist eligible homeowners with a short sale, including a complete release from the
mortgage deficiency.
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3. Glossary of Real Estate Terms
Home Affordable Modification Program (HAMP): A federal program that was established to
assist eligible homeowners with loan modifications in order to lower their monthly mortgage
payments.
LID: LID stands for local improvement district. LIDs are assessments paid in addition to HOA dues
in many master planned communities.
Lien: A lien is the lender’s right to claim the borrower’s property in the event that the borrower
defaults on his/her mortgage. If there is more than one lien on the property, the claim of the
lender holding the first lien will be satisfied before the claim of the lender holding the second lien,
etc.
Lien Release: If the lender provides a lien release to the homeowner at the close of short sale,
this means that the lien against the property is removed to allow the sale of the property but the
debt is not forgiven.
Loan Modification: A mortgage loan modification is a loss mitigation process that involves one or
more of the terms of the borrower’s original mortgage loan being restructured, resulting in a
more affordable payment for the homeowner.
Loss Mitigation: Loss mitigation is a process to avoid foreclosure; the lender tries to help a
borrower who has been unable to make loan payments and is in danger of defaulting on his or her
loan.
Mediation Scheduling Notice (Notice to Appear): A notice sent by the State of Nevada
Foreclosure Mediation Program to homeowners who elect mediation. This notice provides the
date, time and location of the scheduled mediation, as well as the required documentation to be
brought.
Mediator Statement: The State of Nevada Foreclosure mediator provides this statement as a
summary of the outcome of the scheduled mediation (including agreed upon short sale and loan
modification terms) as well as an overview of all documents that were received and those that
are missing.
Mitigation of Terms: A mitigation of terms is a negotiated settlement that occurs when the
lender agrees to accept less than the amount owed to payoff the loan.
Mortgage Backed Security (MBS): An asset-backed security that is secured by a mortgage or
collection of mortgages and is sold to investors.
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4. Glossary of Real Estate Terms
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Mortgage Note: A mortgage note is a written agreement to repay a mortgage loan, which is
secured by the mortgage itself. The mortgage note outlines the repayment terms.
Notice of Default (NOD): A formal written notice from the lender stating that there is a default
on the loan and that legal action is possible.
Notice of Intent to Accelerate Letter: A notification from the lender explaining their intention to
begin the foreclosure process. The homeowner has anywhere from 30 to 60 days to bring the
mortgage current before the lender begins the official foreclosure process.
Notice of Sale (NOS): A formal written and recorded notice from the lender with specific
information about the mortgage loan in default and as well as the date and location where the
lender will be selling the property at public sale.
Processor: A representative of Cogburn Law Offices, responsible for document submission and
lender communication during short sale and loan modification transactions. The loan
modification processor is also responsible for document collection and regular communication
with the client.
Promissory Note: In some short sale cases, the lender will require the homeowner to sign a
promissory note as a condition of the short sale approval. The promissory note requests that the
homeowner pay all or a portion of the mortgage deficiency over time.
Short Sale: The process by which a lender agrees to let the mortgage holder sell the property for
current market value, which is less than the mortgage balance.
SID: SID stands for special improvement district. SIDs are assessments paid in addition to HOA
dues in many master planned communities.
Trustor: The party that borrows money from a trust deed beneficiary (lender) and who deeds the
real property, securing the loan to a trustee (third party) to be held as security until the trustor
(borrower/homeowner) has paid back the lender.
Value Dispute: A value dispute can arise when the lender’s Broker Price Opinion (BPO) comes in
higher than the buyer’s offer. Most often, this discrepancy will result in a counter offer from the
buyer. If an agreement on value cannot be achieved, the seller’s agent will prepare a value
dispute package that will be forwarded to the investor and/or lender. If the value dispute cannot
be resolved, the property may have to be re-listed to secure a new buyer.