Short sale: occurs when the borrower sells the property for less than what they actually owe, thus the term “short sale”.
“Possible Short Sale”: This is a property that has been put on the market prior to getting the lenders approval for a short sale. Most short sale contracts will include language that says: “subject to lender (lien holder) approval”
Foreclosure: Property is sold at a court ordered sale to settle the debt owed to a bank or individual.
Bank Owned Property: a.k.a. REO (Real Estate Owned) property. Property taken into the banks’ inventory after a foreclosure sale.
Loss Mitigation Department: Department at the bank that works with consumers on short sales, forbearance and loan modification agreements. This department may also be called the Collateral or Work Out Department.
Foreclosure Department: Department at the bank that oversees the foreclosure process once the borrower is in default.
Eviction Department: Notifies homeowner of pending foreclosure and advises when they should vacate the property. They may also hire third party companies to secure the property once vacant and maintain the property until sold.
PMI (Private Mortgage Insurance) Company: The insurance company that will pay the lender in the event of your default. Most PMI companies will have a say as to income/debt limits on your loan modification agreement and will have to approve the final agreement.
The "Investor": This term is used when referencing the entity who actually guaranteed or secured the note - usually Fannie Mae or Freddie Mac. The "investor" is yet another party to the transaction who will have to give the short sale a "thumbs up".
BPO (Broker Price Opinion): Once the lender receives the contract, they will then order a Broker Price Opinion (BPO). The BPO broker will send photos, along with info on three competing and three sold comparable properties to the lender. The lender will use this market data to determine whether or not they will accept your offer.
Mortgage Debt Relief Act: The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. Click the link for the skinny from IRS.gov - http://www.irs.gov/individuals/article/0,,id=179414,00.html
Text or Phone: 270-903-2167
Owensboro, Kentucky 42301