Commonly Used Terms
Foreclosure
The action of taking possession of a mortgaged property when the homeowner fails to keep up with their mortgage payments
Forbearance
When your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances. Forbearance does not erase the amount you owe on your mortgage.
Loan Modification
Is a change made to the terms of an existing loan by a lender. It may involve a reduction in the interest rate, an extension of the length of time for repayment, a different type of loan, or any combination of the three.
Deed in Lieu
Is a transaction in which the homeowner voluntarily transfers title to the property to the bank in exchange for a release from the mortgage obligation. One benefit to a deed in lieu, unlike with a short sale, is that you don’t have to take responsibility for selling your house.
Short Sale
Is when a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner.
DISCLAIMER:
Each situation is different based on your servicer or investor and all these options will require servicer or investor approval.