When a borrower defaults on a loan secured by a mortgage, the lender may foreclose on the property under the terms of the mortgage. Holders of other leins (mechanics lien, home owners' association lien, tax lien) may also foreclose as allowed under the terms of those liens. In Florida, the lien holder sues the borrower for the property as allowed by the lien. At a court hearing, a judge sets an auction sale date. The property is then sold to the highest bidder on the steps of the county courthouse.

Foreclosure Resolutions

There are several alternatives to foreclosure. These include reinstatement, loan modification, short sale, or a normal sale.

Lien

A claim on real estate by someone other than the owner. A lien may be voluntary, such as a mortgage or involuntary, such as lien for unpaid property taxes or a judgement from a civil court case.

Lien Theory

The borrower (mortgagor) retains title (ownership) to the property and the mortgage is a lien against the property. If the borrower defaults on the loan, the mortgage allows the lender (mortgagee) to foreclose. Florida is a lien theory state.

Mechanics Lien

A lien placed against a property by a supplier of unpaid materials or services. This could be from a contractor who is not paid for repairs or improvements. It could also be for an supplier of the contractor who is not paid for materials used on the property.

MLS

Multiple Listings Service: A database used by Realtors to advertise real estate to other Realtors.

Mortgage

A lien placed against real estate to secure repayment of a debt. The mortgage is given from the mortgagor (borrower) to the mortgagee (lender) in exchange for a loan. Upon repayment of the loan, the mortgage is satisfied, removing the lien from the property. It is the mortgage which gives the lender the right to foreclose if the terms of the loan are not met. The term mortgage is commonly used to refer to the debt itself.

Mortgage Broker

A Mortgage Broker works with several lenders to get you the best possible deal on a loan. A loan officer at a bank has access to one lender with a few loan programs. A mortgage broker has access to dozens of lenders with hundreds of loan programs. This competition may mean a better deal for you.

Mortgagee

Lender who receives a mortgage from a mortgagor.

Mortgagor

Borrower who gives a mortgage to a mortgagee in exchange for a loan.

National Association of Realtors

The premier professional organization for real estate licensees. It's members pledge to conduct their business according to the association’s strict Code of Ethics and Standards of Practice.

Note

A written promise to repay a loan. The terms of the loan are spelled out in the note.

Real Estate

Land and all permanently attached improvements.

Real Estate Agent

A real estate sales associate.

Real Estate Broker

A person who is licensed by the State of Florida (or other state as appropriate) to buy, sell, or lease real estate. A broker may operate independently or hire real estate sales associates.

Real Estate Licensee

A person who is licensed by the State of Florida (or other state as appropriate) to buy, sell, or lease real estate. This group is comprised of real estate brokers and real estate sales associates.

Real Estate Sales Associate

A person who is licensed by the State of Florida (or other state as appropriate) to buy, sell, or lease real estate. A Sales Accociate is required to work for a real estate broker.

Realtor

A real estate licensee who is a member of the National Association of Realtors.

Short Sale

Mortgage holders will often agree to accept less than what is owed when the fair market value for a property is less than what the total of all mortgages and other amounts owed. The mortgage holder may agree to a short sale even if the loan is current.

VA

Veterans Administration: Guarantees loans made to qualified veterans.