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The Foreclosure Glossary

You have questions and we have answers. We understand that terms like HARP, HAMP and HAFA are confusing, so we created this Mortgage Industry Terms for you to get informed. Below you will find simple definitions for some of the most commonly used terms in the mortgage industry.

For the well-versed, we’ve also provided a complete lexicon that you can download here.

Please click on a term to expand more information about it.



Only licensed mortgage originators can generate a refinance … A NEW LOAN

HARP 2.0 is available for homeowners who are struggling but current and making mortgage payments on time. Refinancing may reduce the monthly mortgage payment by reducing the interest rate, and/or may change mortgage from adjustable to fixed rate.




  • Approval Rate


If approved, lender may reduce interest rate, and/or payment, extend the term, and fix the rate.

Government modifications require a minimum three (3) month trial period prior to permanent modification.

Primary Factors

  • Front DTI

Program Requirements:
- Loan originated before
January 1, 2009
- Presence of MHA

- Owner Occupied & N/O/O
- Principle balance cannot
exceed $729,750

× Alternative Programs that MAY be incorporated into modification.

Unemployment Program (U/P)

- Borrower unemployed currently
or in the last 12 months
- 6 to 18 month Forbearance
- During Forbearance, lender
required to consider

Principal Reduction (P/R)

- Objective is minimum 10%
reduction in existing principle
- DOJ Settlement Fund up to
$100,000.00 P/R per property

Deed in Lieu

- transfer of title to lender

Short Sale

- Sale of property below principal
balance owed

This option is the most common by an attorney where they will work with the lender to try and settle something fair and reasonable for both parties outside of court.

This is the next step after mitigation where the attorney fights on your behalf in court.

  • Mitigation Approval Rate

*70-75% Approval Rate

  • Non-Government Sponsored
    Mitigations NOT limited to
  • Requires Hardship Verification
  • Does NOT require 31% DTI
  • Unique Plans Per Lender
  • Includes Servicer Programs
  • Includes Investor Programs
  • Includes GSE’s Programs
  • Includes state and local programs
    (i.e.: hardest hit fund)
  • May include partial claim on PMI
  • May include N/O/O properties
  • Lease Back Programs
  • Cash For Keys Programs

The Consumer Financial Protection Bureau (CFPB) is an independent federal agency that holds primary responsibility for regulating consumer protection with regard to financial products and services in the United States.

A “judicial” state requires a judicial review of the foreclosure case before it can be officially processed. The foreclosure process actually begins by filing a Lis Pendens (“a lawsuit pending”) document in a court of law. Following are the states that require judicial review: Connecticut, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, Vermont.

In “non-judicial” states, lenders or trustees file a Notice of Default with the county recorder’s office to commence the foreclosure process, and the process does not need to go through the courts. These states include Michigan, New Hampshire, Tennessee, Utah, Washington D.C., West Virginia.

The remaining 25 states allow both judicial and non-judicial foreclosure, though some have tendencies toward one practice or the other.

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