Terms to know regarding equitable mortgage foreclosure
Trying to navigate an equitable mortgage foreclosure is hard enough as it is, but understanding the terminology of a new world is a different challenge. You might speak to an attorney or real estate agent who’s helping you through the process and hear words that aren’t familiar and get confused. Don’t worry, it happens to everyone. At Claim Surplus, we’re here to help. We can provide you with a brief glossary of terms you need to know.
Clear title
A clear title is one that doesn’t have any defects, which can include anything from liens to boundary disputes. With a clear title, there are no disputations or questions regarding the legal owner of a property.
Default
Every mortgage or loan comes with specific terms and conditions that apply to both the lender and borrower. A loan that’s in default is when the borrower fails to uphold their end of the deal by failing to make payments. Once the loan is in default, the lender can begin the process of obtaining the property they funded the purchase of.
Equitable title
Someone who holds an equitable title has and financial stake and the right to use an asset tied to the title. For instance, a homeowner has contributed financially to the purchase of their home with a down payment and owns equity in the house. They can then take the profits of home improvement projects or appreciation for themselves.
Foreclosure
It’s typical for a lender to require collateral before dispersing a loan. In the case of a mortgage, the home is the collateral for the loan. Should the borrower default on the loan, the lender can force the sale of the property that’s been put up as collateral or security for the loan via foreclosure.
Equitable mortgage foreclosure
Similar to a traditional foreclosure, a lender can sell the property held used as collateral for a loan. However, the borrower is entitled to the established equity above the sale price. For instance, should a homeowner have $40,000 of equity in a home that sells at a market value of $500,000, they are entitled to the $40,000.
Right of redemption
A foreclosure is much more complicated than what many people know or understand. For a borrower who’s foreclosed on their home, there’s much more to it than losing their home and having no shot at getting it back. The right of redemption allows a debtor to reclaim their property if they can come up with the money needed to repay the debt associated with it.
Trustee
A property that’s in foreclosure will be sold at auction by a neutral third party. The trustee is the third party who hosts the auction to sell the property to the highest bidder. The auction is also known as a Sheriff’s Sale, and the sale proceeds will be used to pay back the mortgage lender, tax collectors, banks, and others who have a claim to the property.
Contact us for more
If you’re trying to work through an equitable mortgage foreclosure, get in touch with us at Claim Surplus to get the assistance you need. We’ll make it easy to understand and get you set up with an attorney from our network to help. Schedule an appointment with a member of our team by calling 407-759-6226. You can also send any questions you have using our online contact form.
