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Notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.

PITI
See principal, interest, taxes, and insurance (PITI).

Preforeclosure sale
A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.

quitclaim deed
A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

Refinance transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.

Second mortgage
A mortgage that has a lien position subordinate to the first mortgage.

Section 8 rent
The Housing Choice Voucher Program is a type of Federal assistance provided by the United States Department of Housing and Urban Development (HUD) dedicated to sponsoring subsidized housing for low-income families and individuals. It is more commonly known as Section 8, in reference to the portion of the U.S. Housing Act of 1937 under which the original subsidy program was authorized.

Subsidized housing
is government supported accommodation for people with low to moderate incomes. To meet these goals many governments promote the construction of affordable housing.

Sweat equity
Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

Title
A legal document evidencing a person's right to or ownership of a property.

Two- to four-family property
A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.

Underwriting
The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower's creditworthiness and the quality of the property itself.