When the person who died did not have a Will, a proceeding called an Administration can be filed in the Surrogate’s Court to collect and distribute their belongings. An administrator is a court-appointed individual who handles all remaining financial matters for the person who has died during probate. The administrator organizes all the pieces of the deceased's estate and then settles outstanding debt, expenses, and other obligations. They also distribute all remaining assets according to the decedent's will, or if there was no will (a situation called intestacy), according to the state's intestate laws.

A

A broker price opinion, commonly known as a BPO, is a real estate professional's opinion of a property's value. BPOs are most often used when setting the list price of a property, similar to a comparative market analysis, and in the case of a foreclosure or short sale.

B

If the facts of the case are in dispute - the borrower has presented defenses or counter-claims to the foreclosure - the case may go to trial, and ultimately be decided by a judge (where fraud is alleged, a jury may decide the case). If the judge decides in favor of the lender, then the lender proceeds with filing a motion for an Order of Reference, as a first step towards a foreclosure sale. If the judge decides in favor of the borrower, then the foreclosure may be averted.

T

A stay is a temporary stop to a foreclosure. Borrowers may file an emergency motion with the court to stay the foreclosure sale (called an Order to Show Cause), but must show that they have a meritorious defense and a compelling reason for the stay. Filing for a Chapter 13 bankruptcy can automatically stay a foreclosure sale.

S

After a foreclosed property is sold at auction, the proceeds of the sale go to reimburse the lender and other lien-holders. If the sale price exceeds the amount owed, the extra amount is called a surplus. This money goes to the clerk of the court 'i'or keeping. The borrower must file a motion to claim this money.

S

A plaintiff in a legal case must file and serve a summons along with a complaint. The summons advises the defendant that they must either appear in court on a specified date, or answer the complaint within a specified period of time.

S

A decision granted by a judge based on a motion filed by one of the parties. In a foreclosure case, the judge can issue a summary judgment if he/she decides that the facts in the case are not in dispute, and therefore there is no need for the case to proceed to trial.

S

The lender and borrower may decide to resolve a foreclosure case outside of court by negotiating a agreement, or settlement.

S

The delivery of the summons and complaint to the borrower is called service of process. The lender, through a process server, must attempt to serve the borrower in person. If the process server cannot serve the borrower at his/her home, he may deliver the summons and complaint to another adult residing at the borrower's address. The process server must then send another copy by mail. If no one is home, the process servicer may leave the notice at the door, as well as send it by mail. This is often called "nail and mail" service.

S

The period in which a borrower may avert a foreclosure through a number of means, including selling the property or refinancing the mortgage. The right of redemption period ends the moment the property is sold at auction. In other states, there is a redemption period even after auction, but not in New York State.

R

Once an Order of Reference is signed, a foreclosure case is sent to a referee. The referee computes the total amount owed to the lender by the borrower. Once the Lender has obtained a Judgment of Foreclosure and Sale, the referee oversees the auction of the property. This responsibility includes physically conducting the sale, as well as distributing the proceeds following the sale. Referees are typically attorneys.

R

When a foreclosed property does not sell at auction, the lender takes title to the property. The property is then said to be in RED status. The lender may then try to evict the former homeowner, which the lender usually does through the Housing Court.

R

When a defendant represents him/herself in a court case (as opposed to having an attorney represent him/her). Pro se is Latin for "for self."

P

A person or entity suing another in court. In the case of a foreclosure action, the plaintiff is the owner of the mortgage.

P

An Order of Reference sends a foreclosure case to a referee, who will then determine the full amount owed by the borrower to the lender.

O

If the borrower does not have any defenses or counter-claims to contest the foreclosure, but still wants to be served with all legal papers during the course of the foreclosure case, he/she can file a Notice of Appearance with the court. A copy of the Notice of Appearance must also be sent to the lender's attorney.

N

After a delinquent borrower's loan is accelerated by the lender, he/she is said to be in default.

M

A legal term for a formal request to the court to take action in a case.

M

The process by which a lender and borrower who is behind on his/her mortgage attempt to negotiate a deal that is mutually agreeable to both parties. Some possible avenues of loss mitigation include: loan modification, forbearance, short sale, and deed-in-lieu of foreclosure. The earlier the borrower pursues loss mitigation the better, since negotiating a workable deal also becomes more and more difficult as time passes and arrears accumulate. Loss mitigation becomes more difficult when the borrower has multiple mortgages. For example, the borrower may be able to negotiate a loan modification for one loan that is sustainable and affordable. However, if the borrower is also in default on a second mortgage, and the lender is not willing to negotiate, this second lender may still initiate a foreclosure case against the borrower.

L

A lien is a legal claim placed on a property as security to repay a debt. For example, if a homeowner does not pay his/her property taxes, the city can place a lien on the property for the amount owed. In New York City, these tax liens are typically sold to private entities, which can lead to foreclosure. The entity that owns the lien on the property is called the lien holder.

L

Once signed by a judge, this legal order gives the lender permission to sell the property through a referee, and confirms the total amount owed by the borrower to the lender.

J

The legal process by which a lender forces a property to be sold, in order to collect on a mortgage loan it claims is owed.

An agreement between the lender and a delinquent borrower wherein the borrower typically pays a lump sum up front, and then enters into a payment plan for the remainder of the arrears. Borrowers need to be cautioned that when they enter into these agreements, they usually waive certain key rights, such as their ability to raise defenses to contest a foreclosure case.

F

The process by which parties gather information through document requests, written questions (called interrogatories), and depositions. Discovery can take a long time.

D

When the borrower initially falls behind on the mortgage (usually 2-3 months), but before the mortgage has defaulted, he/she is said to be " delinquent" on the mortgage.

D

After a foreclosed property is sold at auction, the proceeds of the sale go to reimburse the lender and other lien-holders. If the sale price does not sufficiently cover the amount owed, the amount still owed to the lender is called a deficiency.

D

As part of the answer to the complaint, the borrower includes defenses, or Claims that contest the foreclosure. These claims may be based on deficiencies in the foreclosure process (e.g. improper service or lack of standing), or illegalities in the loan itself.

D

The person or entity who is being sued in court. In the case of a foreclosure proceeding, the defendant is the homeowner who has defaulted on his/her mortgage.

D

If the borrower fails to answer the complaint, the borrower has defaulted in the foreclosure case -- meaning that the lender automatically prevails. The lender is not required to serve the borrower with any further notices as the foreclosure case proceeds through the courts.

D

To avoid going through a Foreclosure, the borrower voluntarily turns over the deed to the property to the lender. In exchange, the lender agrees that the borrower does not owe any additional debt -- allowing him/her to walk away from the property without a deficiency judgment, and without a foreclosure sale on his/her credit report. This option, as well as other loss mitigation options, may have tax consequences.

D

As part of the answer to the complaint, the borrower may include counterclaims, or claims that that the lender owes the borrower money due to violations of the law, thereby reducing the amount that the borrower may owe the lender.

C

A written document served to the borrower by the lender’s attorney, indicating that the lender has filed a foreclosure lawsuit, and explaining the grounds for that action against the borrower.

C

A public sale of foreclosed properties. Anyone can place a bid to purchase a property. Properties are sold to the highest bidder. Once the property has been sold at auction, the original homeowner loses all "right of redemption," or opportunity to regain ownership of the property by paying the amount due.

A

The amount of back payments - plus late fees and other charges - owed by the borrower to the lender.

A

A written response to the complaint, submitted by the borrower to the lender’s attorney, and filed with the court. The answer is due 20 calendar days from the date of service if the borrower is served in person, or 30 calendar days if the borrower is not personally served. The answer can be submitted with the help of an attorney, or pro se (representing yourself without an attorney). The answer contains defenses to the foreclosure and may also include counterclaims.

A

A letter sent from the lender (or its representative) to the borrower, which "calls in" the loan - effectively stating that the borrower must pay the entire loan amount by a specified date, otherwise the lender will file a foreclosure lawsuit. Once the mortgage has been accelerated, the lender is no longer compelled to accept arrears, though may still do so.

A

Arbie offers its clients many services including representation in Landlord & Tenant court (L&T). The 30‐day notice is the legal notice required by the courts to provide notice to the tenants/squatters of the unit demanding them to leave. If they do not, a court index number is purchased and a court date is set.

D

During the surrogate process, an application is made to make one or two people the signers of the estate. This person cannot be a felon. Typically this is a close family member of the deceased.

L

An estate is the legal entity that temporarily owns a deceased persons assets and liabilities. If the deceased has left a will, it is used to then determine the shares or distribution of the estate. If no will has been left, then the family members must prove, to a judge in surrogates’ court, that they are the rightful heirs to the estate. Typically when a person passes, 50% of the estate goes to the surviving spouse, if any, and the remaining 50% is to be equally divided among the children of the deceased.

E

This is the ratio that helps a lender understand the usage or breakdown of your income. For instance, if buyer A make 70,000 per year, is applying for a $1,500/m mortgage and only pays $500/m for a car, his DTI Ratio is ((500x12)+(1500x12))/70,000 = 28.6%. This is an ideal ratio. If buyer B makes $120,000 per year and is applying for the same mortgage but has $6,000 a month in reoccurring debt, his front‐end ratio is 75%. This DTI is too high according to current lender guidelines and would not qualify. Front End DTI is your mortgage divided by your income. Back End DTI is defined as the mortgage plus all of your monthly obligations divided by your income.

D

Default interest starts to accrue on loans once the borrower stops paying, or defaults. For mortgages, the rates typically range between 8‐12% but can go up to 20‐24%. An example of a $500,000 mortgage that hasn’t been paid for 4 years and has a default interest of 9% would be: $500,000 x 1.09 x 1.09 x 1.09 x 1.09 = $705,790.81. We put a 1 in front of the .09 because it’s compounding interest. Not paying the mortgage most likely means the owner hasn’t paid their property taxes or homeowners insurance, which is usually advanced by the lender and is the owner’s responsibility to pay back.

D

An agreement between the lender and the borrower wherein one or more of the original terms of the mortgage is changed in order to make the mortgage more affordable to the borrower. As with forbearance agreements, borrowers who agree to loan modifications usually waive many key rights, such as their ability to raise defenses to contest a foreclosure case. This option, as well as other loss mitigation options, may have tax consequences.A MOD is a restructuring or modification of terms form the original loan agreement. It is typical that the lender would take all of the accrued default interest and add it to the “back” of the loan. Meaning that they would extend the payment time so that the borrower can still afford the monthly payments. There are many possibilities but generally, it is NOT in the best interest of the homeowner to do this financially as the owner is locked in to pay more for a home than its current worth. It’s also difficult to receive a MOD due to the high mortgage amounts verse low incomes of the people who are in danger. Lenders usually require a 30% front end and 55% back end ratios.

L

A legal process in which a judge determines that the debt of the individual is too great to pay back and completely wipes out his or her obligations for repayment (chapter 7), or where the judge will force all Lenders to negotiate a payment plan over a certain amount of time up to 5 years. (Chapter 13). It is very typical that a homeowner who files for bankruptcy chapter 7 is under the impression that he no longer owns the house. However, this is incorrect. The chapter 7 has removed the homeowner’s promissory note; the ownership over the property (the deed) and the mortgage is still in effect. In this scenario, the owner is still responsible for property taxes, water, and the maintenance of the property. Generally these are easy scenarios to deal with because the owner has already mentally abandoned this property.

B

A document where the borrower signs a personal guarantee to the lender. This collateralizes the personal finances of the borrower. It allows the lender to report against the borrower’s credit.

P

The action a lender takes to legally repose the real property collateralizing a mortgage, which is in default. This process has many steps and specifically in New York can take years to complete.

F

Latin for Law Suit. When a Lis Pendens (LP) is filed against a property, it gets recorded with the county and is public information. LP’s can be researched on eCourts or by requesting more information from one of our title examiners. There are different types of LP’s including Foreclosure, Tax Lien, Specific Performance, or Constructive Trust to name a few. Literally meaning, "suit pending" in Latin, lis pendens is a filing with the county clerk that indicates to the public that the property’s ownership is being disputed. This notice formally begins the foreclosure process

L

A formal evaluation of property value done by a licensed Appraiser. This is ordered generally for Bank purposes.

A

A sale that must occur due to hardship where the liens are greater than the value. An example of this would be a mortgage of $600,000 against a home that’s valued at $300,000. When the amount due on the loan is more than the value of the property, lenders will sometimes agree to accept a short sale. In a short sale, the homeowner sells the property to a third party at fair market value and the lender agrees to accept less than the full balance in satisfaction of the loan. This option, as well as other loss mitigation options, may have tax consequences.

S

Securitization is the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities. The interest and principal payments from the assets are passed through to the purchasers of the securities. Image result for securitization A typical example of securitization is a mortgage-backed security, a type of asset-backed security that is secured by a collection of mortgages.

S

These terms refer to the insurer or the investor of the note both of which are regulated by the federal government.

F

A loan servicer is the party responsible for collecting payments and escrow and then managing payments made for property taxes and insurance. In the event of foreclosure, the servicer is the party that negotiates terms between the borrower and Investor. The investor is the owner of the note; the servicer handles the day‐to‐day responsibilities of the note.

L

An agreement between the lender and borrower describing the terms of the agreement.

N

a loan collateralized by real property. A Coop is not real property and cannot have a mortgage recorded against it. Therefore a UCC1 is filed which is a type of lien showing position.

M