First Mortgage:glossary FreeLoanComparison.com

First Mortgage:

The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there are exceptions.

Some states, like California, do not record mortgages. Instead, they record a deed of trust which is essentially the same thing.

A type of security instrument in which the borrower conveys title to real property to a third party (trustee) to be held in trust as security for the lender. Typically, includes a provision indicating the trustee shall re-convey the title upon payment of the debt, and conversely, has the right to sell the land and pay the debt in the event of a default by the borrower.

Collateral:

In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.

Property, securities or capital pledged to secure a loan or line of credit.

Bankruptcy:

Bankruptcies are of various types, but the most common for an individual seem to be a "Chapter 7 No Asset" bankruptcy which relieves the borrower of most types of debts. A borrower cannot usually qualify for an "A" paper loan for a period of two years after the bankruptcy has been discharged and requires the re-establishment of an ability to repay debt.

A provision of federal law that allows a debtor to surrender assets to the bankruptcy court and be relieved of the future obligation to repay unsecured debt. After bankruptcy, the debtor is discharged and unsecured creditors may not pursue further collection efforts. While bankruptcy is pending, secured creditors (those holding collateral, deeds of trust or judgment liens) continue to have security interests in the property, but may not take other actions to collect from the debtor.

Creditor:

A person to whom money is owed.

Judgement Lien:

A judgement is a lien against all real property owned by the judgement debtor in the county where the judgement is docketed (recorded).

Default:

Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.

A breach or failure to perform the terms of a note or mortgage.

Foreclosure:

The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Judgment:

A decision made by a court of law. In judgements that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgement's creditor.

Judicial Foreclosure:

A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court. Other states use non-judicial foreclosure.

Eviction:

The lawful expulsion of an occupant from real property.

Deed-In-Lieu:

Short for "deed in lieu of foreclosure," this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.