Loan modification

A Loan Modification is the changing of one or more characteristic of a note such as the term of the loan, the interest rate, or lowering the principal balance of the home because the borrower owes to the bank more than the property is worth.

Shortsale

A sale of a house in which the proceeds fall short of what the owner still owes on the property. Most lenders will agree to discount a loan balance due to an economic or financial hardship on the part of the home owner or forgive the rest of what is owed on the mortgage when the owner cannot make full mortgage payments.

Deed-in-lieu

Is a document used which allows you to transfer your property voluntarily to the lender if you are unable to maintain payments and cannot sell the home at market value.

Forbearance

This is used most of the time, when a Notice of Default has been filed. You are allowed to delay or reduce payments for a short period, with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender, if in agreement, will then temporarily cease legal actions.

Short Refinance

Short financing is the refinancing of a mortgage by a lender for a borrower currently in default on his or her payments. This is done to avoid foreclosure. Typically, the new loan amount is less than the existing outstanding loan amount and the difference is typically forgiven by the lender. A lender might do this because it is more cost effective than foreclosure proceedings.

Refinance

 Refinancing is simply paying off an old mortgage with the proceeds of a new mortgage. Usually this is done with different and better interest rates or terms.