Terms are defined as they are commonly understood in the mortgage and real estate industry.

Short Sale: The sale of your property short of the full debt amount. This is accomplished by negotiating with your Lender a sale amount, or payoff, for less than what is owed.

Foreclosure: A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage loan. Under the terms of the mortgage note, the Lender will accelerate the mortgage loan (demand payment of the entire balance in full) and, unless payment is received (in virtually all cases it is just the past due amounts plus fees) will seize and sell the property as stipulated in the terms of the mortgage contract.

Deed in lieu: This procedure allows you to transfer your property voluntarily to the Lender and your mortgage debt or deficiency may be forgiven. The impact on your credit score may be the equivalent of a foreclosure.

Deficiency judgment: As it applies to your mortgage loan, a judgment ordered by the court for any unpaid balance of your mortgage loan remaining after the property has been sold, either through foreclosure or, in a minority of cases, a short sale. This is not common practice in the mortgage industry but your mortgage note often provides this remedy to the Lender. Some states do not allow deficiency judgments for deficiency balances on mortgage loans. Virginia does allow for deficiency judgments.

Pay-Off: Complete repayment of loan principal, interest and any other sums due. Payoff occurs either over the scheduled term of the loan, or through one or more payments so that the lien may be released and the title allowed to be transferred.
Second Trust: an additional loan imposed on property with a first mortgage.
CMA (Comparative Market Analysis): is a neighborhood survey of recently sold homes that are similar in size and style to the home you want to sell or buy. Buyers, sellers and real estate agents use a CMA to establish a fair price range for a home.

Loss Mitigation: When a repayment plan may be proposed to or negotiated for a homeowner who is usually delinquent on their mortgage loan and/or may be facing foreclosure. Either the monthly payments are adjusted or the balance due is modified. Loss mitigation may also prevent foreclosure or bankruptcy.
Reinstatement: When a borrower restores a past-due loan to a current status. Lenders will demand reinstatement to prevent foreclosure, however, borrowers are often able to modify their mortgage loan in lieu of making a full reinstatement to prevent foreclosure.

BPO (Broker Price Opinion) : A price analysis ordered by a lending institution to determine current property valuation.
Loan Modification: In a modification, the lender or servicer adjusts the terms of the loan, or the balance due, to make the loan more affordable for the homeowner. It may lengthen the amortization schedule or lower the interest rate to cut the monthly payments, or roll the past due amount into the loan and re-amortize the new balance so the borrower can pay the additional debt back over time. In some cases a borrower can negotiate the principal amount due.
Forbearance: When a lender or creditor grants temporary relief to a borrower by temporarily suspending required mortgage payments for up to three months. The suspended payments are added to the end of the mortgage loan.
Acceleration: A clause in your mortgage agreement which allows the Lender to declare the entire unpaid mortgage loan balance due and payable if specified events of default should occur. Such events include failure to make monthly mortgage payments or non-escrowed real estate tax payments.

Work Out Plan A series of steps taken by the Lender with a borrower to resolve the problem of delinquent loan payments. Steps can include rescheduling loan payments into lower installments over a longer period of time so that the entire outstanding principal is eventually repaid.

HUD-1 : Known as a "closing sheet" or "settlement form," this itemized work sheet outlines the fees associated with a loan and is required at closing.

Trustee: A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another. The trustee will be the foreclosing person or entity who acts on behalf of the Lender. Most often the Lender works with a foreclosing attorney or firm who will file a “Substitution of Trustee” in the local land records to allow the new Trustee to begin foreclosure proceedings. This is the first public sign that a borrower is facing foreclosure. Many “short-sale companies” and “hard money” lenders (private investors) review daily the local land records to search for these filings to target homeowners facing foreclosure.

Default: Failure to make mortgage payments as agreed to in a mortgage note based on the terms and at the designated time set forth in the mortgage or deed of trust.

Lien: A claim by one person or company on the property of another as security for money owed. Such claims may include obligations not met or satisfied such as tax liens, judgments, unpaid taxes, homeowner association fees, and mechanics liens. Payment and satisfaction of liens is required at closing to convey clear title on the short sale of property.
Marketable Title: A title that is free and clear of objectionable liens or “clouds,” or other title defects.