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Home Loan Assistance Glossary

Home loan assistance terms in simple language

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Appraisal or Appraised Value

The professional opinion of a licensed and independent Appraiser about the value of your home. The Appraiser visits the home, evaluates its interior and exterior condition, and compares the property to other homes recently sold in the area.


Broker Price Opinion (BPO)

The estimated value of your property as determined by a Real Estate Broker, firm or other qualified individual.

Buyer’s Agent

The Agent who represents the buyer in a real estate transaction.

Buyer's Closing Costs (BCCs)

The costs that a seller may pay on behalf of a buyer. Non-recurring costs are one-time costs such as escrow, title insurance and loan fees. Recurring costs are those that do not end, such as property taxes and/or insurance.



Used to bring a loan in default current by adding delinquent and unpaid interest, fees and/or escrow advances to the unpaid balance of the loan.

Cash Contribution

Depending upon your financial situation and at the investor's discretion, a cash contribution or promissory note for future payment may be requested. A contribution does not always imply that the remaining deficiency will be waived.

Clear Title

A title that is marketable and free of liens or legal questions regarding ownership of the property.

Cooperative Short Sale

A program where you agree to list your property for 90-120 calendar days at a price we’ve determined is near the current market value in order to find a short sale buyer. This program may help you avoid foreclosure if you owe more on your mortgage than your house is worth. It also offers relocation assistance to help with moving expenses.


Deed in Lieu of Foreclosure or Deed in Lieu

Used as an alternative to foreclosure, a deed in lieu of foreclosure is where you sign over the title to your property to the lender because you are unable to make your mortgage payments. May also be referred to as deed in lieu or 'voluntary conveyance.' A deed in lieu of foreclosure will have a negative impact on your credit.


If you are unable to keep your payments up to date or meet the other terms of your loan outlined in your mortgage loan documents, your loan is considered to be in default.

Deferment (also known as Forbearance)

A postponement of your home loan payments for a set period of time. You will still accrue interest but you can defer or postpone those payments for an agreed-upon number of months. After that is over, your lender will work with you to develop a repayment plan to make your regularly scheduled mortgage payments while catching up on the deferred payments.


Failure to make payments on time.



This is where your lender collects part of your mortgage payment in a special account to pay your taxes and insurance premiums when they become due. The amount in this account is based on the estimated amount necessary to pay these obligations each year.


If you’re experiencing a temporary hardship and are less than 90 days behind on your home loan payments, you may be eligible for an extension. Your lender will suspend a number of your home loan payments for a period of time and add those payments to the back end of your loan – extending the length of your loan term. To be considered for an extension, you must prove that you will be able to make future payments.


Fair Market Value (FMV)

The likely selling price of a home between a willing buyer and seller on the open market. The fair market value is usually determined by an Appraiser for a new mortgage or home equity loan. For a short sale, a specialist works on behalf of the investor to get the best possible fair market value.

Federal Housing Administration (FHA)

The Federal Housing Administration (FHA) is a U.S. government agency that insures mortgages to provide options to low and moderate income home buyers that may not be available through conventional financing.

Federal Housing Administration (FHA) Modification

For customers with a loan that is guaranteed by the Federal Housing Administration (FHA), this program offers loan modifications that help create affordable and sustainable monthly mortgage payments. All modifications begin on a trial basis but are made permanent after you successfully make trial period payments over a 3-month period and provide all required documentation.


A temporary agreement between you and your lender to postpone your loan payments for a set period of time during a temporary hardship. At the end of the postponement, overdue payments can be paid all at once, the past due amount can be added to the back-end of your mortgage, or you can increase your monthly mortgage payments until the past due amount is repaid.


A legal procedure where a lender sells a property securing a mortgage loan at a public auction or sale to repay a borrower's defaulted loan. Foreclosure proceedings typically begin after you have made no payments for 60 days or more. If there are no successful third party bidders at the foreclosure auction, title to the property will be transferred to the lender, which may then market and sell the property (known as an REO property) to recover its losses on the loan.


Hardship Letter

A letter to your lender that explains the circumstances behind your inability to pay your monthly home loan payments.

Home Depreciation

Home depreciation is a drop in the value of your property for any reason (home deterioration or damage, market conditions, weak economy, etc.).

Home Retention

Keeping your home in the face of foreclosure is home retention. Home retention options generally involve loan modifications, forbearance, and repayment plans. Asking for home retention help when you first struggle to make your mortgage payments is the best strategy to try to keep your home.


Imminent Default

When a borrower is current on their mortgage loan but is at risk of not being able to continue paying the monthly home loan payments due to financial hardship.


The person or institution that owns the mortgages or mortgage-backed securities, provides the funds the homeowner borrows to purchase a property. Many loans have multiple investors, and each investor can set different policies regarding available remedies for loans in default.

Investor Decision

If you choose to sell your home for less than what is owed on the mortgage in a short sale, your loan servicer must obtain approval from the owner of your mortgage. The investor will make a decision that Bank of America is legally obligated to follow.



The legal claim a creditor has to a property that is used as collateral or security for repayment of a debt. All outstanding liens must be paid before ownership of a property can be transferred from one party to another.

Listing Agent

The licensed real estate agent who works with a homeowner to list the house for sale, market the property and solicit offers.

Loan Modification

A change to the original terms of your loan. These could include lowering your interest rate, extending the term or maturity date of the loan, moving from an adjustable to a fixed-rate loan, deferring some portion of the unpaid principal balance to the end of the loan, and/or forgiving some portion of the unpaid principal balance.

Loss Mitigation

When you and your lender work together for a solution to avoid foreclosure, if possible. This includes home retention options as well as short sale or deed in lieu of foreclosure.


Mortgage Insurance (MI)

A type of insurance that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Also known as private mortgage insurance or PMI. A short sale will often require the mortgage insurer’s approval.


Partial Claim

A no-interest loan given to you by a lender on an FHA-insured loan to pay back any missing or partial mortgage payments and default-related fees and reinstate the loan. This involves a new note and mortgage/deed of trust. This is a one-time only loan. The partial claim loan is paid back when your mortgage loan is paid off or when your FHA insurance is cancelled.


Reconciled Value

A comparison of the last appraisal with a current broker price opinion (BPO) to update the current market value of a property. Once received, this value is good for up to 90 days and supersedes the original appraisal for marketing purposes.

Redemption Period

After foreclosure sale of a home in certain states where a homeowner cannot be removed or evicted from their home. This provides the homeowner additional time to pay off the loan in full to avoid foreclosure.


Paying off your existing loan with the proceeds from a new loan in order to take advantage of lower interest rates and other more favorable loan terms such as switching from an adjustable-rate loan to a fixed-rate loan.

Repayment Plan

If you are behind on your payments, your lender may agree to a repayment plan that allows you to make your regularly scheduled mortgage payments, plus pay off a portion of the past due amounts over time.


Second Mortgage / Second Lien

The traditional term for a home equity loan or line of credit because it is generally not the first or primary lien on the title, which usually is made to purchase the home.

Short Sale

If you can no longer afford to make your mortgage payments and your house is worth less than you owe, you can sell your house at the current fair market value. Because the proceeds from the sale may not pay off all you owe, the investor or owner of your loan must approve the sale. When selling, the goal is for an amount greater than any and all outstanding liens against the property. You may still be responsible for any deficiency still owed to the lender.

Short Sale Approval Letter

The physical letter issued after the investor agrees to the terms that will permit the short sale of your house.


Temporary Hardship

A situation where you experience a loss of income but the circumstances have an end in sight, such as a natural disaster, job loss, or medical condition that temporarily prevents you from working.

Traditional Short Sale

When an offer has been received prior to obtaining permission to pursue a Short Sale.

Call us

866 502 9005

866 502 9005 Mon-Fri 8 a.m. – 10 p.m. ET
Sat 8 a.m. – 6:30 p.m. ET

Help is available in English, Spanish and many other languages