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Balance Realty Group

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Declining Market Values for Homes

Short Sale Definition of Terms

B.P.O.- Broker Price Opinion
Estimate of value by Real Estate professional working in subject property area having no personal interest in the property. Broker Price Opinions are similar to an appraisal usually focusing on a properties liquidation value.

Foreclosure -
A proceeding in court to extinguish all rights, title, and interest of the owner(s) of property in order to sell the property to satisfy a lien against it.

Foreclosure Sale -
A sale of property used as security for a debt, to satisfy said debt.

Deficiency Judgment -
Is a judgment lien against a debtor, defendant, or borrower whose shortsale or foreclosure sale did not produce sufficient funds to pay the mortgage in full. This option may or may not be available to the lender.

Promissory Note -
Is a contract where one party makes an unconditional promise in writing to pay a sum of money to the other either at a fixed or determinable future time, or on demand of the payee, under specific terms. Sometimes in short sales lenders pursue promissory notes for all or some of the debt forgiven.

Loan Work-Out -
Term used by lenders to describe department handling borrowers who are late in mortgage payments.

R.E.O. - Real Estate Owned -
After a property is foreclosed on by the lien holder, and does not sell at auction the property is owned by the lending institution. Every bank has a R.E.O department, and the bank will put the property (asset) on the market for sale.

Overencumbered -
The total of all the loans secured by the property exceed the value of the property.

Discounted Note -
Face value of the note is reduced to a new lower amount a lender will accept as payment in full. Discounting the note is part of the short sale process to reach a settled account for the mortgagee.

1099 Form -
A form by the I.R.S. and is used in the United States income tax system to prepare and file an information return to report various types of income other than wages, salaries, and tips. In short sales and foreclosures some sellers may receive a 1099 form as the forgiven debt is considered income.

Loss Mitigation -
The department of the bank that negotiates the short sale.

Junior Lien -
The second mortgage on a property.

N.O.D. - Notice of Default -
A notice filed to show that the borrower under a mortgage of deed of trust is in default or behind on payments.

Lis Pendens -
The term refers to any pending lawsuit usually after a home owner is 90 days late on mortgage payments. A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office.

F.H.A. - Federal Housing Administration -
A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sales price. Currently the required downpayment for F.H.A. loans is 3.5 %.

F.H.L.M.C. (Freddie Mac) Federal Home Loan Mortgage Corporation -
A federal agency purchasing first mortgages, both conventional and federally insured, from members of the Federal Reserve system and the Federal Home Loan Bank system.

F.N.M.A. (Fannie Mae) -
A private corporation dealing in the purchase of first mortgages at discounts.

We can help!

We at Balance Realty Group are at your disposal using all of our experience, skills, and industry contacts to help you navigate thought this difficult time.

p: 813.865.0700
ext. 1127

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