Foreclosure attorneys glossary
Short, plain-English definitions of the terms you'll meet when choosing a Foreclosure Attorney provider in Islip Metro.
- What is a Chapter 13 plan?
- A Chapter 13 bankruptcy plan consolidates a homeowner's debts into one court-approved repayment schedule lasting 3 to 5 years, allowing them to catch up on missed mortgage payments and avoid foreclosure while retaining their home.
- What is a deficiency judgment?
- A deficiency judgment is a court order requiring a borrower to pay the lender the difference between the foreclosed property's sale price and the outstanding loan balance plus costs.
- What is a forbearance agreement?
- A forbearance agreement is a temporary arrangement between a borrower and lender that allows the homeowner to pause or reduce mortgage payments for a set period, typically 3 to 12 months, during financial hardship.
- What is a judgment of foreclosure and sale?
- A judgment of foreclosure and sale is a court order issued at the end of a judicial foreclosure case that authorizes the lender to sell the property and specifies the total amount owed, including principal, interest, costs, and attorney fees.
- What is a lis pendens?
- A lis pendens is a notice of pendency recorded against a property to notify the public that a lawsuit, typically a foreclosure action, is pending against that property in New York.
- What is a loan servicer?
- A loan servicer is the company that collects mortgage payments and manages a borrower's account on behalf of the actual note holder or investor.
- What is a mandatory settlement conference in foreclosure cases?
- A mandatory settlement conference is a court-ordered meeting required under New York CPLR 3408 in residential foreclosure cases where the lender, homeowner, and their attorneys meet to explore resolution before trial.
- What is a net present value test?
- A net present value test is the financial analysis a loan servicer performs to compare the long-term profit of modifying a delinquent mortgage against the profit from foreclosing and reselling the property.
- What is a notice of default?
- A notice of default is the formal notification a lender issues to a borrower after missing mortgage payments, marking the beginning of the foreclosure process and triggering the borrower's opportunity to cure the debt or pursue alternatives.
- What is a power of sale clause?
- A power of sale clause is a mortgage provision that authorizes a lender to sell the property directly without obtaining a court judgment, but New York law prohibits this non-judicial foreclosure method and instead requires judicial foreclosure through the court system.
- What is a proof of claim?
- A proof of claim is the official document a creditor files in bankruptcy court to assert the amount and basis of debt owed by the debtor.
- What is a redemption period?
- A redemption period is the time window during which a borrower can stop a foreclosure by paying off all outstanding debt, or after a judicial foreclosure sale in some states, reclaim the property by paying the sale price and costs.
- What is a referee's deed?
- A referee's deed is the legal document issued by a court officer after a foreclosure auction sale in New York that conveys title from the foreclosed property to the winning bidder.
- What is a surplus money proceeding?
- A surplus money proceeding is a New York court action that allows a homeowner or other interested party to claim funds remaining after a foreclosure sale when the sale price exceeds the mortgage debt and associated costs.
- What is a trial modification period?
- A trial modification period is a set timeframe, typically 3 to 6 months, during which a borrower makes reduced payments under proposed loan modification terms to demonstrate ability to sustain the new agreement before it becomes permanent.
- What is an automatic stay in bankruptcy?
- An automatic stay is a court order that immediately stops foreclosure, repossession, wage garnishment, and most collection actions when a debtor files a bankruptcy petition.
- What is an escrow shortage?
- An escrow shortage is a deficit in a mortgage account's escrow reserve when the funds set aside for property taxes and insurance prove insufficient to cover actual payments.
- What is an RPAPL 1304 notice?
- An RPAPL 1304 notice is a mandatory written warning required under New York Real Property Actions and Proceedings Law section 1304, which lenders must send to borrowers at least 90 days before starting a foreclosure action.
- What is cure and reinstatement?
- Cure and reinstatement is the repayment of all delinquent mortgage payments and associated costs in a single payment to bring a defaulted loan current and halt foreclosure proceedings.
- What is judicial vs non-judicial foreclosure?
- Judicial foreclosure is a court-supervised process to recover a mortgaged property, while non-judicial foreclosure is an out-of-court sale authorized by a power-of-sale clause. New York uses judicial foreclosure exclusively.
- What is loss mitigation?
- Loss mitigation is the set of options and alternatives a lender may offer to a borrower facing default or foreclosure to avoid losing the property through forced sale.
- What is note and mortgage assignment?
- Note and mortgage assignment is the legal transfer of a borrower's promissory note and mortgage deed from one lender or servicer to another, creating a chain of ownership that must be properly documented in court proceedings.
- What is robo-signing?
- Robo-signing is the practice of signing large volumes of mortgage and foreclosure documents without individually reviewing their accuracy or authenticity, often using facsimile signatures or delegated authority.
- What is standing in foreclosure defense?
- Standing is the legal right of a party to bring a foreclosure action, requiring proof that the plaintiff owns the promissory note and mortgage securing the debt. Lack of standing is a defense that challenges the creditor's authority to foreclose.