Foreclosure Crisis Glossary

Other Foreclosure Glossaries:

auction, auction defense: After a bank has foreclosed, it may sell the property at a public auction. If no one bids, or the auction is prevented from happening by an auction defense (usually by gathering a large crowd at the auction to make a lot of noise), the bank remains in possession of the property.

Banks Got Bailed Out, We Got Sold Out: A pithy slogan reminding people that while banks got saved from financial ruin starting in 2008 via TARP, homeowners who found themselves in financial trouble or underwater were left to drown by the Federal Government.

banksters: Generally, those bank and financial executives whose actions led to the financial crisis of 2008. Also bank officials who were responsible for robosigning, foreclosure fraud, and subprime loans.

dual tracking: The process by which a bank may work with a homeowner on a loan modification while at the same time foreclosing on the home. Some dual tracking may be poor communication within a bank, and some is certainly intentional.

eviction, eviction defense: Eviction is the physical removal of a homeowner who has lost their house to foreclosure, usually done by the county Sheriff’s Department. Deterring an eviction by gathering a large number of people at a home before sheriff’s deputies arrive, keeping a home occupied with people who are trained to deal if the sheriff comes, and/or creating a lot of unfavorable publicity for the bank ordering an eviction, is known as an eviction defense.

foreclosure, foreclosure fraud, fraudclosure: The process of a bank taking ownership of a home because of the failure of a homeowner to pay a mortgage. When done illegally or under questionable authority, it is known as foreclosure fraud or fraudclosure.

foreclosure crisis: Begun in 2007, the economic circumstances that have resulted in tens of millions of homes being foreclosed on and/or gone underwater, with millions of families losing their homes.

HAMP: Often used to refer to a set of programs set up by the Federal Government to help homeowners in danger of foreclosure. HAMP is actually one specific program; other, similar ones are known as HARP, HAMA, 2MP and UP.

Homeowner’s Bill of Rights: A California law that took effect Jan 1, 2013, which theoretically ends dual tracking, demands a single point of contact, and allows homeowners to contest foreclosure fraud in court.

loan modification: Reworking the terms of a mortgage, generally so that the monthly payment is reduced. May also involve a principal reduction.

notice of default: The official document a bank sends a homeowner informing them that they have failed to pay the mortgage and that the bank intends to foreclose.

predatory buying: Buying up properties that have been foreclosed on “on the cheap,” often by a real estate company using cash offers, sometimes in cahoots with the foreclosing bank.

principal reduction: Lessening the amount of a loan to be paid back. Can be part of a loan modification.

robosigning: The (illegal) process of having a bank officer sign foreclosure documents without verifying that the information in the documents is accurate (e.g., that the bank actually owns the mortgage of the house being foreclosured on).

short sale: The sale of a home which is underwater, wherein the homeowner does not need to pay back to the bank the full value of the loan immediately and sometimes does not ever have to pay it back.

single point of contact: Part of the Homeowner’s Bill of Rights. Insists that a bank not shuffle you off to a different person every time you call; that you have one or a small number of people assigned to handle your case who are familar with it and whom you can speak to.

subprime loan: A risky loan not justified by the borrower’s financial situation, generally given at a higher interest rate than other loans. Millions of subprime loans were pushed on people who did not necessarily understand what they were getting into in the years leading up to the foreclosure crisis.

unlawful detainer (“UD”):  Remaining in possession of a property, such as continuing to live in your home after the bank has foreclosed. If a bank claims a homeowner is in unlawful detainer, it can start unlawful detainer proceedings (in many states, including California, this requires a lawsuit and a court appearance).

underwater: A term used to refer to a home which has a mortgage that is more than the home can be sold for. E.g., a home is purchased for $300,000 with a $250,000 loan. But now the home could only be sold for $200,000. The house is underwater by $50,000 because the proceeds from the sale will not cover paying off the loan principal to the tune of $50,000.

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