Guidance for The Movement in the Real Estate Market


Definitions and Vocabulary for Sellers:

The purpose of this form is for the lender to be able to request past tax transmittals from the IRS to be able to verify information for your short sale or modification request.

Assessed value:
The value placed on the land and improvements as a basis for taxation. In California the valuation is determined by the county Assessor’s Office, and the assessed value is typically one – quarter of it’s market value.

Bank owned property:
Refers to a property that is owned by the bank after a Trustee sale has taken place. It becomes “bank owned” after a lender sells a property to pay for a Deed of Trust that is in default. Most Deeds of Trust have a power of sale clause, giving the trustee the power to auction the home to the highest bidder. If the home is not sold at auction, it will become a bank owned property.

In a Trust Deed, the lender is designated as the beneficiary.

Closing statement:
Prepared by the escrow officer, it is the statement that accounts for all funds received or expected at close of escrow. It lists what costs are to be seller costs and which are to be buyer costs and balances the funds.

Dodd Frank certification form:
it is requested by the federal government in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law provides that no person shall be eligible to begin receiving assistance from the Making Home Affordable Program, authorized under the Emergency Economic Stabilization Act of 2008, or any other mortgage assistance authorized or funded by the Act, if within the last ten years the borrower has been convicted of one of the following. A) Felony, larceny, theft, fraud, or forgery B) money laundering C) tax evasion. The form certifies that a borrower is in compliance with this requirement.

Deed of Trust:
A document executed by the owner of the land by which the land was given as a security for the payment of the note. In California and some other states the Deed of Trust is used in place of a mortgage.

Failure to perform a duty or pay an obligation.

A proceeding to enforce a lien by the sale of the property in order to satisfy the debt.

HAFA program:
It was established by the U.S. Treasury Department per a treasury supplemental directive 09-09. Its program implementation date was April 5, 2010 and is set to expire on December 31, 2012. HAFA is the first program to set standards for how a short sale transaction should be conducted. More than 100 servicers of mortgage loans, whose portfolios account for more than 90 percent of the U.S. home loans participate in the HAFA program.

A measure of interest rate changes used to determine changes in a ARMs interest rate.

Loan to value ratio:
The relationship between the amount of the loan to the appraised value of the property, expressed as a percentage of the appraised value.

Listing agreement:
Employs and grants the broker of record to assist the seller in procuring a buyer to purchase the home based on the terms of the agreement. Terms would include the period of time that the broker has to procure a buyer and under what terms including purchase price and broker compensation. This is the first step of the listing process. The broker can not market the property without the employment contract.

A written evidence of debt executed by borrower.  A note is usually secured by a Deed of Trust.

Notice of Default:
A recorded notice to a borrower declaring that a default has occurred and that legal action may be taken.

Notice of Sale:
Also known as Notice of Trustee sale, it is a notice which a lender is required to give before the Trustee Sale is conducted.

Owner Title Insurance policy:
A policy that protects the purchaser, mortgagee or other party against losses.

The allocation of property taxes, interest, insurance premiums, rental income, etc; between buyer and seller proportionate to their time of ownership.

Request for Notice of Default:

Request for Mortgage Assistance:
Also known as the RMA Form, it is the application form for a borrower to request participation in the Making Home Affordable program. The form outlines your personal information, financial position, states your financial hardship, and verifies that you meet the program criteria for participating in the program.

Short Sale:
Is the sale of real property where the fair market sales price is less than the loan balance.

Trustee Sale:
When a lender sells a property to pay for a Deed of Trust that is in default. Most Deeds of Trust have a power of sale clause, giving the trustee the power to auction the home to the highest bidder. If the home is not sold at auction, the home will then become a bank owned property.

Third party authorization:
A form granting permission from the borrower to their agent and title company to call on their behalf to obtain short sale information updates.