Module 10

A notice of sale must be given at least _______________ before the date of a foreclosure sale in a non-judicial foreclosure.

21 days

Judicial foreclosure

A court proceeding that begins when the lender files a complaint and records a notice in the public records announcing a claim on the property to potential buyers

Which of the following must be a judicial foreclosure in Texas?

A home equity lien

Deed in lieu of foreclosure

An alternative to foreclosure wherein the lenders accept a deed rather than funds to settle the debt. Also called friendly foreclosure or voluntary deed

Default of the terms of the loan may cause damage to the _______________ and could lead to loss of the property through foreclosure.

Borrower's credit score

Default

Breach or nonperformance of the terms of a note or covenants of a mortgage

When the price at auction on a foreclosed property is insufficient to cover the unpaid balance of the loan, the lender may sue for a _______________.

Deficiency Judgment

At any time prior to the foreclosure, the borrower has the right to step in and pay what is owed. This is called _______________.

Equity of redemption

A(n) _______________ loan is exempt from a deficiency judgment.

FHA

Under the Texas Constitution, before lenders commence foreclosure, they must give the borrower time to do one of the following, except:

File suit against the lender in court (Remedy the condition creating the ground for foreclosure, Convey the homestead property to the lender by deed in lieu of foreclosure, Pay the debt secured by the homestead property)

The _______________ program is designed for borrowers who cannot afford their current mortgage and need to transition to more inexpensive housing.

HAFA

The _______________ allows the Treasury to work with loan providers to refinance existing loans to achieve a 31% front-end ratio.

HAMP

In a _______________, the lender files suit with the judicial system and the borrower receives a note in the mail demanding payment.

Judicial foreclosure

Foreclosure

Legal procedure by which secured property may be sold to satisfy an unpaid note

The _______________ allows taxpayers to exclude income from the discharge of debt on their principal residence.

Mortgage Debt Relief Act of 2007

If a borrower is in default, the _______________ may start the foreclosure process.

Mortgage Servicer

In a _______________, the mortgage contains a power of sale clause.

Power of sale

A non-judicial foreclosure may occur when a _______________ exists in a mortgage.

Power of sale clause

Default-related services include all of the following, except:

Purchase costs (Foreclosure costs, Property inspections, Property preservation)

The _______________ offers delinquent borrowers the opportunity to prevent foreclosure by working with lenders to refinance their existing loan.

SMP

A lender may seek a deficiency judgment when the _______________ at the foreclosure auction is less than what is owed on the property.

Sales Price

A power of sale is a _______________.

Statutory foreclosure

In a _______________, the lender files a lawsuit of the homeowner that is in default.

Strict foreclosure

Strict foreclosure

The lender files a lawsuit on the homeowner that has defaulted

Forbearance

The most common way of resolving a loan default through a plan to suspend payments for a limited time until the borrower is able to begin a repayment schedule

Power of sale

The power of sale clause is a clause in the deed of trust where the borrower gives the lender the authority to foreclose in the event of default.

Recasting

The re-amortizing of a mortgage

Deficiency judgment

Through a motion filed in court, the lender seeks to receive an unpaid balance or deficiency on the original mortgage

The _______________ offers rural homeowners to lower their monthly mortgage payment to no more than 31% of their verified monthly gross income.

USDA's special loan servicing

Streamlined Modification Program (SMP)

in cooperation with Fannie Mae and Freddie Mac, offers delinquent borrowers the opportunity to prevent foreclosure by working with lenders to refinance existing loans

Home Affordable Foreclosure Alternatives® (HAFA) program

is designed for borrowers who cannot afford their current mortgage and have a pressing need to transition to more inexpensive housing. HAFA provides two options for transitioning out of a borrower's current mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure.

Equity of redemption

t any time up to the moment of the foreclosure, the borrower has the right to step in and pay what is owed and reclaim property forfeited due to mortgage default