Definitions

*Disclaimer: This information is for California residents only.

Loan Modification:

A loan modification is defined as “the modification of an existing loan agreement between a borrower and a lender, whereby the lender agrees to either; lower the payment amounts by spreading the loan over a longer term, lowering the APR (annual percentage rate – interest), combining the loan with other loans in a debt consolidation loan. Sometimes all three of these modification scenarios are made on the note(s).

Short Sale:

In this current real estate market many home owners find themselves owing more on their homes than what they are worth and in order for them to be able to sell the property they have to get their lien holder (lender) to agree to a short sale. A short sale is an “arrangement” between the current owner of a home and the bank that holds the note(s) on their home to accept an offer for less than the total amount owed to pay off the loan. The difference between the amount owed and what the bank collects at the short sale is known as the “deficiency”

Deed In Lieu of Foreclosure:

Deed in lieu of foreclosure is a way to get out of a home loan. A borrower who cannot pay his mortgage may attempt a deed in lieu of foreclosure transaction. Instead of going through the foreclosure process, the borrower hands his keys over to the lender.

Foreclosure:

Foreclosure is the legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. Foreclosure usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

In California the foreclosure process is a non-judicial process (no court involvement) and typically takes about six months after which the lender takes possession of your home.