C. A legal proceeding by the lender to terminate a mortgagor's interest in property, either to gain title or to force a sale in order to satisfy the unpaid debt.
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to pronunciationLegal Definition -
A legal proceeding to terminate a mortgagor's interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property.
Black's Law Dictionary® Eighth Edition © 2004
Current Usage -
Foreclosure lingo
November 16, 2008
OrlandoSentinel.com
•The laws, terminology and customary practices that govern foreclosure vary from state to state, but they typically include a legal notice sent to the delinquent borrower and filed in court warning that the lender is starting the process of foreclosure, which could result in the homeowner's property being seized.
•If the default is not "cured" through full repayment, a partial repayment agreed to by the lender or a loan modification of some type, then the court may notify the borrower that the property is to be sold at public auction.
•If the home is not sold before that to eliminate the default, then it is sent to auction "on the courthouse steps," though more often than not, the bidding takes place in an office set aside in the local courthouse.
•If no one offers enough to pay off the debt, the bank holding the loan typically reclaims the home for the amount owed. The lender may then hold on to the house, hoping the market improves, or sell it through local Realtors or a private auction.
•A home that has gone through the foreclosure process and been reclaimed by the lender — typically a bank — is known in the industry as an REO — short for "real estate owned."
SOURCE: Sentinel research
'Upside down'
When a borrower owes more on a property than it's worth, it's commonly known as being "upside down." In more technical terms, it's "negative equity." Homes with negative equity are at greater risk of foreclosure. First American CoreLogic recently analyzed 42million properties with first and/or second mortgages, accounting for more than 80percent of all residential mortgages, and found that 18 percent were in a negative-equity position as of Sept.30. But most of the upside-down loans were concentrated in seven states.
% of mortgages upsidedown'
State
Nevada 48%
Michigan 39%
Arizona 29%
Florida 29%
California 27%
Georgia 23%
Ohio 22%
SOURCE: First American CoreLogic
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