This article defines common words and phrases used in foreclosure cases.

Auditor’s Report:  the accounting statement filed after the foreclosure sale occurs.  This statement lists the money that the foreclosure sale generated as well as the money owed to the lender including the debt and foreclosure fees and costs.  If the money generated from the foreclosure sale does not satisfy the debt and the fees and costs, there will be a deficiency.  If the money generated from the foreclosure sale exceeds the debt and fees and costs, there will be surplus proceeds.  The court auditor will determine who is entitled to the surplus proceeds.  The court auditor mails a copy of the Auditor’s Report to the Homeowner and to any junior lienholders.  

Borrower (or mortgagor): a person who has received money from a lender to purchase or refinance a home and has agreed to pay the money back.

Cash for Keys: an agreement made between a borrower and servicer where the servicer pays an amount of money for the borrower to clean and vacate the property by a particular date. These agreements are usually made on a case-by-case basis.

Deed-in-Lieu of Foreclosure: an agreement to turn over real estate to lender instead of going into foreclosure. 

Default: not making mortgage payments when they are due.  

Deficiency: the proceeds from the foreclosure sale of the property are not enough to satisfy the money, interest, and costs owed to the lender.

Final loss mitigation affidavit: sworn statement the lender submits to the court stating that the lender has made a determination on whether there are no loss mitigation options available for the borrower.  If the lender has denied the borrower, the Final Loss Mitigation Affidavit must list the reasons for the denial.

Foreclosure mediation: a conference where both sides meet with a neutral person, called an Administrative Law Judge or “ALJ” to discuss the borrower’s options and try to reach agreement on a loss mitigation program to avoid foreclosure.

Housing counseling services:  assistance provided to borrowers or lenders by nonprofit and government entities that are identified on a list maintained by the Department of Housing and Community Development.  These services are free for homeowners in Maryland.

Lender (or creditor): a company or individual who loans the money to a borrower with the expectation of being paid back, plus a fee for borrowing, called interest.

Loan Modification: changing one or more of the terms of a borrower's loan to provide a more affordable payment.

Loss Mitigation: options to avoid foreclosure. The servicer may agree to a different mortgage plan for the borrower if they can’t make loan payments under the current plan. This may include mortgage modification, cash for keys, or a short-sale.

Loss mitigation analysis:  When a lender looks at the facts and circumstances of a loan secured by owner-occupied residential property to decide: (1) Whether a borrower qualifies for a loan modification; and (2) If there will be no loan modification, whether any other loss mitigation program may be made available to the mortgagor or grantor.

Notice of Intent to Foreclose:  a written notice to a borrower telling him/her that foreclosure proceedings are coming soon.  This notice gives important information about the loan and who to contact to apply for loss mitigation.

Order to Docket: foreclosure action that must be filed in court in order for lender to move forward with foreclosure proceedings.   

Owner-occupied residential property: a property that is occupied by a person who: (1) Has some ownership of the property; and (2) Uses the property as his/her primary residence.

Pre-file mediation:  foreclosure mediation that happens before a foreclosure action is filed in court.

Preliminary loss mitigation affidavit: a sworn statement that states the lender has not done a loss mitigation analysis and includes reasons why the loss mitigation analysis has not been done.

Post-file mediation:  foreclosure mediation that happens after a foreclosure action has been filed in court.

Servicer: the company that collects your mortgage payments and processes applications for modifications or other changes to your mortgage agreement. The servicer may be the same as the lender or a separate company.

Short Sale: the lender agrees to let you sell your property for less than what you owe and to accept the proceeds of that sale as full payment of the debt.

Surplus Proceeds: the amount of money remaining after the debt and all foreclosure fees and costs have been satisfied.  This figure will be listed on the Auditor’s Report.