DISCLAIMER: The information on this website is not to be construed as giving legal advice or other advice. The glossary and definitions contained herein are provided for general assistance and are not to be cited or quoted as legal authority.
· Attorney: An attorney is a person licensed in the State of Illinois to represent people or businesses in court. If you do not have an attorney and cannot afford one, free legal advice can be found at:
Chancery Division Advice Desk
Richard J. Daley Center
50 W. Washington Street, Room 1303
Hours of 9:00 A.M. and 4:00 P.M.
or call the Legal Information Line at (312) 603-2285 between 8:30 A.M. and 4:30 P.M.
· Borrower: The person who accepted money from the lender to purchase a home. (Also the mortgagor and defendant.)
· Capitalization: Capitalization occurs when items owed on a loan (like past due interest, past due taxes, late charges, legal costs, and other fees) are added to the loan amount and are treated as part of the new principal balance. Often when past due amounts are “capitalized,” the lender “reamortizes” the loan, meaning that the lender recalculates the monthly payment using the existing interest rate and the new principal balance.
· Case Management Hearing: All cases are assigned an automatic initial case management hearing. In residential mortgage foreclosure cases, this hearing is set for 60 days after the date of filing. The date, time, and courtroom are noted on the summons in the upper right hand corner (beneath the case number). Any follow up status or case management hearings are at the discretion of the judge.
· Case Manager: A court employee that assists the judges in case management. Case managers are available during court calls and sit at tables in the hallways on the 28th Floor of the Daley Center. Case managers help facilitate communication and document exchange between the bank and the borrower.
· Case Number: This is the number assigned to the case by the court. It consists of two numbers followed by a “CH” and then several numbers. EXAMPLE: 12 CH 12345
· Calendar Number: This is the number of the calendar to which a case is assigned. A judge presides over a calendar.
· Complaint: A legal document filed with the court asking for a judgment against another. In a mortgage foreclosure, the complaint sets out the agreement to pay (note), the failure by the mortgagor to pay (default), the amount due, and asks for a judgment and the permission to sell the property to obtain the amount owed on the loan.
· Consent Foreclosure: A judicial proceeding that pays off a mortgage without the property being auctioned.
· Court: The neutral, third-party institution that makes findings and determines if the foreclosure can proceed under the law. All mortgage foreclosure courtrooms are located at the Richard J. Daley Center, 50 W. Washington Street, 28th Floor.
· Court Clerk: The court clerk is the person who stamps and enters court orders after the judge signs orders. A court clerk cannot give legal advice.
· Court Order: The court order is a legal document and a piece of paper that the judge signs. An order may direct parties to complete actions before a certain date and may enter judgments. Do not leave court without a copy of the order
· Deed-in-lieu of Foreclosure: The mortgagee accepts a deed from the mortgagor instead of foreclosing.
· Default (Bank Default): Failing to pay the monthly amount due on the mortgage. Most defaults involve failure to make required mortgage payments. When a homeowner fails to make a scheduled payment owed to the bank for the house, a homeowner is “in default” and the bank may pursue foreclosure.
· Default (Court Default): When a defendant does not respond to a complaint for foreclosure and does not file an appearance or answer, the defendant is in default in the legal case.
· Defendant: A defendant is the person being sued in court. In a mortgage foreclosure case, the defendant includes the homeowner (anyone who signed the mortgage and note) and any other person or entity who may have an interest in the property.
· Deficiency: The amount a borrower owes to the lender after the sale of the property at a foreclosure sale in the event that the property is sold for less than the amount of the debt owed.
· Dignified Exit: Also sometimes referred to as a “graceful exit”. This means that a defendant cannot keep the home and understands when and how he or she should leave the property. This may include a short sale, consent foreclosure, or deed-in-lieu of foreclosure.
· Foreclosure: After a homeowner fails to make the monthly payments on a mortgage, a bank can go to court to take the home away from a homeowner. A foreclosure begins when the bank goes to court. When the bank files the lawsuit, it is known as a “foreclosure.”
· Forbearance: A plan to cure a default that may involve temporary suspension of payments or repayment plan based on a modified payment amount (with a portion paid towards the past due amount).
· HAMP: Home Affordability Modification Program. Administered by the federal government. http://www.makinghomeaffordable.gov/pages/default.aspx
· HAFA: Home Affordability Foreclosure Alternatives. Administered by the federal government. http://www.makinghomeaffordable.gov.
· HARP: Home Affordability Refinance Program. Administered by the federal government. http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx
· Housing Counselor: Housing counselors are counselors who work for HUD-certified agencies that can provide advice on foreclosure prevention and assist a borrower with workout options with the bank if a borrower is facing foreclosure. HUD-certified housing counseling services are free. Do not pay anyone for a loan modification.
· HUD: U.S. Department of Housing and Urban Development. www.hud.gov. HUD sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, and credit issues.
· Investor: The group that put up the money for the loan. An investor may have also bought the loan at a later date.
· Judge: The official that presides over a case. A judge is a neutral, third-party employed to ensure an equal opportunity for justice for all parties to a case. A judge issues court orders. A judge cannot give legal advice.
· Judgment of Foreclosure: A court order that a judge signs allowing the bank to proceed to sell the property at an auction.
· Judicial Sale: A court-ordered sale of the property at an auction by a selling officer to the highest bidder.
· Law Clerk: A court employee who assists the judge. A law clerk cannot give legal advice.
· Lender: The financial institution where a borrower obtained a loan for the mortgage.
· Loan Modification: An agreement to permanently change one or more terms of the original mortgage (e.g., change in interest rate, payment amount, term, or capitalization of arrears over an extended term).
· Mediation: Mediation is the chance to talk with your lender and try to work out an agreement with the help of a knowledgeable, neutral person. Mediation requires the appearance of the mortgagor/borrower and the mortgagee/lender. A meeting with a housing counselor or legal aid attorney is NOT mediation. Mediation occurs by court order only.
· Mortgage: The document by which a bank can take your home if you do not pay the bank back for the house.
· Mortgage Foreclosure: See “Foreclosure.”
· Mortgage Backed Security: A type of investment backed by pools of mortgage loans with payments on the underlying mortgages generating the return to investors.
· Mortgagee: The lender (bank) who accepts the promise of property to secure the loan.
· Mortgagor: The person who borrows money under the note and promises the property to the bank if he or she does not pay the loan. The mortgagor is a defendant in the foreclosure action.
· Negative Amortization: A debt that is structured such that the monthly payments do not cover the amount of interest due for that period. It results in an increasing loan balance.
· Note: The agreement by the lender to loan money to the borrower and the promise by the borrower to repay the money upon certain terms.
· Order: See Court Order
· Pay Option ARM: A mortgage that allows a number of different payment options each month, including minimal payments. The minimum payment option usually does not cover all of the interest accruing on the loan.
· Plaintiff: The person or entity bringing the lawsuit. In a mortgage foreclosure, the plaintiff is the lender and/or servicer.
· Pooling and Service Agreement (PSA): A Pooling and Servicing Agreement (PSA) is the result of a process that gathers many mortgages on different properties together, and sells them as one package to investors. The investors hire a single entity to collect the payments (the servicer) for all the loans gathered together.
· Principal Reduction: A reduction in the total amount owed on the loan.
· Redemption: A homeowner has the right to pay off the loan during the redemption period, which is at least seven (7) months after you receive the summons.
· Refinancing: The process of paying off a loan by borrowing new money either from the existing lender or a new lender.
· Reinstatement: A homeowner has the right to bring the mortgage current (meaning paying all late payments, penalties, fees and costs) within 90 days after receiving the summons.
· Sale: See Judicial Sale
· Servicer: The entity that collects payments on behalf of the investor and lender.
· Short Sale: The sale of real estate for an amount less than the amount owed to all lenders.
· Sheriff: The Sheriff is a publicly elected official that executes all Orders for Possession and removes the homeowner from the home when the foreclosure case is complete.
· Summons: The summons is a notification to a person that a lawsuit has been filed against him or her. A copy of a Mortgage Foreclosure Summons can be found at: http://126.96.36.199/Forms/pdf_files/CCCH0100.pdf. If you receive a Mortgage Foreclosure Summons, do not ignore it. Your court date is noted in the upper right corner.