Basic Terminology

In order to be able to communicate effectively, it's important that you understand some of the terminology that you'll use when dealing with foreclosures. Below, I've tried to list some of the basics. By no means is this list exhaustive, but it's a good start.

Foreclosure: legal proceeding where a property owner's rights are terminated and property is sold at public auction. This is typically due to default on a mortgage and proceeds are applied to mortgage debt.

Short Sale: Real Estate is sold for less than what is owed on the property by negotiating with lien holders for payoff reduction.

Pre-foreclosure Sale: Short sales are the most common form of pre-foreclosure sale, but there are other ways of negotiating a pre-foreclosure that we'll discuss

Bank Owned Property/Real Estate Owned (REO): Property that has already gone to public auction and is now owned by the bank due to inability by the bank to sell to private buyer at auction.

Brokers Price Opinion ("BPO"): This is an property evaluation method typically used by lenders where they hire a Real Estate Broker to do an analysis of the property and determine an "opinion" of value for the property

Courthouse Auction: This is the public auction that is held at the courthouse where the property can be purchased by the highest bidder.

Mortgage/Lien/Deed of Trust: These are all terms to describe a sum of money that is owed to a debtor on the property.

Deed: The deed is not the same as the Deed of Trust. The Deed is the document that determines who has ownership/title to the property.

Title Search: The process of researching title history of a particular property including changes of ownership and past and present liens on the property, typically done by attorney or title company.

Title Insurance: Insurance policy that can be purchased to protect insured party from any unforeseen claims against title.

To Be Continued...