Loan Modification, Short Sale, Deed in Lieu, and Foreclosure.

The definitions below are solely meant to provide a general understanding of terms, they do not constitute legal advice, seek a licensed attorney for clarification.

Loan Modification

A temporary or permanent change to the terms of the mortgage, usually to the interest rate and or term; the change generally leads to a reduction in payment. Typically modifications are done in response to a borrower’s reduced ability to pay the loan.

Short Sale

The sale of real estate where the funds derived from the sale are less than the amount owed against the property.

Died in Lieu of Foreclosure

A deed instrument in which the borrower conveys interest of their property to the lender to satisfy a loan that is typically in default in an effort to avoid foreclosure proceedings.

Foreclosure

The legal process by which the creditor (mortgagee or other lien holder) follows to regain or possess collateral following default of mortgage payments.