Monday, May. 12, 2008

Glossary of foreclosure terms

ADJUSTABLE RATE FINANCING

A home financing method where the annual percentage rate starts low, often called a "teaser rate," and then gradually adjusts higher, raising the monthly payments a homeowner owes.

FORECLOSURE FILING

A suit filed by a lender seeking payment of a homeowner's loan obligations or the return of the property.

FORECLOSURE SUIT

A lawsuit filed by a lender seeking to foreclose on a property on allegations the owner has become delinquent in making payments.

LIS PENDENS

Latin for "a pending suit," it's a legally required notice that a property is the subject of pending litigation.

MORTGAGE-BACKED SECURITIES

Securities tied to collections of mortgages. The interest and principal payments from the mortgage pool is paid out to investors.

SECURITIZED INVESTMENT VEHICLES

A pool of investment assets, also called conduits, made up of a variety of financing products, including mortgage-backed securities. SIVs were at the center of the subprime mortgage crisis.

SUBPRIME LOANS

Loans typically given to borrowers with poor credit. The loans usually come with much higher interest rates than prime rates, which are currently around 5 percent or 6 percent.