Loanfactz Definitions

Foreclosure

A legal action that terminates (ends) all ownership rights in a home when the homebuyer fails to make the * mortgage payments or is otherwise in * default under the terms of the mortgage.

Glossary For This Page
(In Alphabetical Order)

* Collateral
Property which is pledged as security for a debt. In the case of a mortgage, the collateral would be the land, the house, and other buildings and improvements.

* Default
Failure to perform a legal obligation; a default includes failure to make the payments on a financial obligation, but may also be a failure to perform some action or service that is non monetary (not relating to money).

* Lien
A claim or charge on property for payment of some debt. With respect to a mortgage, it is the right of the lender to take the title to your property if you do not make the payments due on the mortgage.

* Mortgage
A document the borrower signs which specifies a specific amount of money which is to be used for purchase of a home, using the property as * collateral, where a * lien is placed on the property as security for repayment of the debt. In some states the term mortgage is also used to describe the document you sign to show that you have granted the lender a lien on your home. Other states use a deed of trust document instead of a mortgage.

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