NATIONAL HOMEOWNERS COLLEGE

Abatement generally refers to a lessening or reduction of something. It may refer to the removal of a problem which is contrary to public or private policy, or endangers others.

An option given to lenders through an "acceleration" clause in the mortgage or deed of trust requiring the borrower to pay the entire balance of the loan all at once if their loan is in default.

A sworn statement in writing usually given while under oath or in the presence of a notary.

The process in which a licensed or authorized person gives an estimate of property value.

The difference between the increased value of the property and the original value.

An asset-backed security is a security whose value and income payments are derived from and collateralized (or "backed") by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets that are unable to be sold individually. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization, and allows the risk of investing in the underlying assets to be diversified because each security will represent a fraction of the total value of the diverse pool of underlying assets. The pools of underlying assets can include common payments from credit cards, auto loans, and mortgage loans, to esoteric cash flows from aircraft leases, royalty payments and movie revenues

The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).

Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.

A broad definition for any person or entity (like a charity) who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution. There is also an "incidental beneficiary" or a "third party beneficiary" who gets a benefit although not specifically named, such as someone who will make a profit if a piece of property is distributed to another.

The offered amount for a property for sale at auction.

A document given to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.

A chain of title is the sequence of historical transfers of title to a property. The "chain" runs from the present owner back to the original owner of the property. In situations where documentation of ownership is important, it is often necessary to reconstruct the chain of title. To facilitate this, a record of title documents may be maintained by a registry office or civil law notary.

A title that is not burdened with defects.

The term cloud on title refers to any irregularity in the chain of title of property (usually real property) that would give a reasonable person pause before accepting a conveyance of title. A cloud on title reduces the value and marketability of property because any prospective buyer aware of the cloud will know that they are buying the risk the grantor may not be able to convey good title. Often, the discovery of a cloud on title will provide the grantee a reason to back out of a contract for the sale of real property.

A bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan in default.