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Damages
Monetary compensation set by a court for a loss suffered by a party to a lawsuit.
Debt Service
Annual amount to be paid by a debtor for money borrowed.
Decree
The final order of a court in many states.
Deed
The legal document commonly used to transfer ownership of real estate from one owner to the next.
Deed in Lieu of Foreclosure
Instead of waiting until the lender forces the sale of the house in foreclosure, usually to the lender, the borrower
just deeds the property to the lender.
Deed of Reconveyance
An instrument that releases and discharges a deed of trust.
Deed of Restriction
A restriction imposed in a deed to limit the use of the land. A deed might include clauses preventing the sale of
liquor or defining the size, type, value, or placement of improvements.
Deed of Trust
(Trust Deed) A deed given by the property owner to secure performance of an act (such as making payments on a
loan). A deed of trust is a type of mortgage.
Default
Failure to fulfill a duty or promise, or to discharge an obligation; omission or failure to perform an act. In property
foreclosure, usually the failure to pay loan installment repayments when they become due.
Defeasance Clause
The clause in a mortgage that permits the mortgagor to redeem his or her property upon the payment of the
obligations to the mortgagee.
Defeased
In medieval times ownership rights constituted a fee. To be defeased meant to lose the fee, or today, to lose
ownership.
Defendants Original Answer
The first responsive pleading of a defendant in a lawsuit.
Deficiency
Money a borrower who has lost real estate in foreclosure still owes to the lender because the foreclosure sale
failed to generate enough to pay off the loan. Frequently, lenders acquire title to real estate at foreclosures, in
which case they most often give credit only for the fair market value of the property against the balance due on the
loan. Any unpaid balance on the loan after all just credits are applied is the usual amount of a deficiency. Many
states limit or restrict deficiencies.
Deficiency Judgment
A court judgment that a defaulting borrower owes a deficiency.
Delinquency
The state of affairs when payments on a note or other loan obligation are past due.
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Demand Note
A note that is payable on demand of the holder.
Department of Veterans Affairs
The arm of the federal government that guarantees loans and performs other services for veterans. This agency
was formerly known as the Veterans Administration (VA).
Depreciation
Decrease in the value. Depreciation in taxation language is reducing the value of the property over the years.
Discharge of Indebtedness
A lender tells a borrower that a loan doesn't have to be paid back, also called discharge of debt.
Discovery
The phase of a lawsuit in which respective parties are permitted to ask each other formal written and oral
questions, obtain copies of documents and in general find out the facts related to the lawsuit.
Documentary Transfer Tax
A tax applicable to transfers of real property. Notice of payment is entered on the face of the deed or on a separate
paper filed with the deed.
Double Whammy
Some lenders refuse to permit assumptions, which is one blow, while at the same time insisting on a hefty
prepayment penalty when the non assumable loan is paid off early, which is a second blow.
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Down Payment
The initial cash a borrower pays to the seller to purchase a property. It does not include closing costs.
Due on Encumbrance
A clause in a mortgage that prevents a borrower from encumbering title to the property with liens, leases or other
encumbrances without the lender's consent.
Due on Sale
A clause in a mortgage that demands that the borrower pay off the loan in full if the house is ever sold. The lender
can't prevent the sale, but it can demand payment in full on the loan balance, which often has the same practical
effect. In the absence of a due on sale clause, the loan is assumable without the lender's consent. Older FHA and
DVA loans are assumable without the consent of the lender.
Next Foreclosure Definitions: Earnest Money >> Extension Agreement
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