Deficiency: The difference between the balance outstanding on a loan and proceeds from the sale of the loan collateral or property. Delinquency: Failure to make a payment when it is due. A loan is generally considered delinquent when it is 30 or more days past due. Equity: An owner’s financial interest in a property which is calculated by subtracting the amount still owed on the mortgage loan(s) from the current market value of the property. Escrow Account: A separate account into which a portion of each monthly mortgage payment is placed; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc. Escrow Analysis: A periodic review of escrow accounts to make sure that there are sufficient funds to pay the taxes and insurance on a home when they are due. First mortgage: A mortgage that has a first-priority claim against the property in the event the homeowner defaults on the loan. Fixed-Rate Mortgage: A mortgage loan with a fixed interest rate that remains the same for the life of the loan. Forbearance: A temporary period of time during which a regular monthly mortgage payment is reduced or suspended. Foreclosure: The legal process by which a property may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the homeowner is in default for a reason other than the failure to make timely
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