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Housing
Glossary of Foreclosure-Related Terms

Adjourn—To put off a court session, such as a hearing or a trial, until a later time. 

Amortization—The process of paying off a loan, such as a mortgage, gradually—usually by periodic payments of principal and interest. 

Answer—A document filed by the defendant in response to the complaint filed by the plaintiff. The answer admits to the statements in plaintiff’s complaint that are true and denies the statements that are false. An answer may also include a counterclaim. 

Answer to Counterclaim—The document filed by the plaintiff in response to the defendant’s counterclaim. 

Arrears—A legal term for a type of debt which is overdue after missing an expected payment. It is also used (in the form in arrears) for payments that occur at the end of a period. 

Collateral— The borrower's asset that is forfeited to the lender if the borrower is unable to pay a loan. In a home loan, the property is the collateral. If the borrower does not pay the debt, the lender can bring a foreclosure case in court and the property may be sold to satisfy the debt. 

Complaint—The document that begins a lawsuit in the civil division of the New Jersey Superior Court. A complaint must set forth claims that give the party being sued a general idea about what he or she is being sued for. The party who files the complaint is known as the plaintiff.  

Consolidate Debt—To replace multiple loans with a single loan, which often has a lower monthly payment and a longer repayment period. Also called a consolidation loan. 

Cure (right to cure)—To cure means to pay the amount that you owe and reinstate the mortgage on the property. 

Counterclaim—A complaint filed by the defendant against the plaintiff as a part of the defendant’s response to the plaintiff’s complaint. Usually filed with the defendant’s answer.  

Defendant—The party sued by the plaintiff in a civil lawsuit (or by the state in a criminal lawsuit).  

Defense—A defendant’s stated reason why the plaintiff (or, in a criminal case, the prosecutor) has no valid case. 

Encumbrancer—A party holding a mortgage, lien, lease, or restrictions relating to property. 

Equity—The amount of money left over if you subtract the amount of any liens (mortgages or loans) from the property value. 

Escrow/Escrowed—Money in escrow is money placed into an account held by a lender into which the homeowner puts money to pay for taxes and insurance. 

Hearing—A public proceeding in a court in which witnesses are heard, evidence is presented, and the parties to the lawsuit are present and have a right to be heard. There is no jury present. This proceeding is formal, but somewhat less formal than a trial.  

Judgment—The court order that represents the court’s written decision in a lawsuit. A judgment should be signed and dated on the date that the case is decided.  

Litigants—The name given to the parties involved in a lawsuit. 

Market value—The going or current rate. 

Mediation—The act of attempting to resolve a dispute or disputes with the help of a neutral third party before a trial or hearing.  

Motion—An application to the court for some kind of legal relief. Motions are usually filed after an order has been entered in a lawsuit, although sometimes they can be filed at the beginning of a lawsuit in place of an answer to a complaint or with an answer to a complaint.  

Negotiate —To communicate with another party for the purpose of reaching an understanding.  

Notice—The word for the legal notification required by law or agreement.  

Note—A legal document that is a written promise by one party to re-pay a loan or other sum of money to another party at a specific interest rate during a specific period of time.  

Order—The court’s written decision in a lawsuit, signed and dated on the date that the case is decided. See also judgment. 

Plaintiff—The party who begins a lawsuit by filing a complaint. 

Principal—A sum of money owed as a debt; the total loan amount borrowed. The fact value of the note. 

Qualified Written Request—A written request for mortgage documents made to the company collecting mortgage payments from you (your mortgage servicer). 

Real Estate Closing—A real estate closing is the last step in the process of transferring ownership of real estate property from seller to buyer. 

Reinstating (the mortgage)—To reinstate the mortgage and stop the foreclosure proceeding, the homeowner must pay the lender the total amount in default, plus interest, attorney’s fees, and any other costs incurred by the lender in connection with the foreclosure proceedings. 

Rescind—To unmake or undo a contract between two parties.  

Rescission—The act of unmaking of a contract between parties (the undoing of a transaction). 

Redeem/Redemption—The statutory right of a defaulting mortgager to recover property, within a specific period of time after a foreclosure or tax sale, by paying the outstanding debt or charges. The purpose is to avoid selling property for less than its value. 

Refinance—The process of paying off one loan with the proceeds from another loan, using the same property as security. 

Rider—An amendment (addition or change) to a contract or a policy. 

Security Interest—A property interest created by agreement or by law. Usually, this type of interest is created in order to make certain that the person responsible for repaying a debt actually repays the debt.  

Servicer/Mortgage Servicer—A company responsible for collecting monthly payments and penalties, insurance and tax payments, and keeping records related to a mortgage loan. 

Service/Service of Process—The legal term for the act of delivering to or leaving with a person who is a party to a lawsuit, a summons or writ, or other official court paper, which gives that party notice of the fact that someone has filed a lawsuit against him or her.  

Sheriff—In New Jersey, an officer of the court who employs officers who perform official duties, such as providing security to the courthouse, serving process on litigants, and enforcing court judgments, such as writs of execution. Sometimes referred to, especially in other states, as a constable. 

Standing—A party’s legal right to bring a legal claim (complaint) or to see a court’s enforcement of a right or duty. 

Stay—The postponement or halting of a court proceeding.  

Summons—The official notice to the defendant that someone has filed a lawsuit against him or her. It also tells the defendant where and how he or she must respond to the complaint and how long he or she has to respond.  

Third-Party Complaint—A complaint filed by a defendant against a third party claiming that the third party is responsible for some or all of the damages that the plaintiff is trying to recover from the defendant.  

Trial—A public proceeding in which witnesses may testify, evidence may be presented, and the parties to the lawsuit have a right to testify. In addition, a jury may be present at a trial. A trial is usually more formal than a hearing.  

Unconscionable Commercial Practices—The term unconscionable means literally without conscience, or showing no regard for conscience, sense of decency, or justice. Commercial practices refer to the sale and distribution of goods and the financing of credit transactions on the goods sold.  

Utilities—This term refers to services such as natural gas, electricity, water, and telecommunications and cable television.

 
10/27/2011