 |
|
|
| Collection Terms and A.S.A.P. Lingo |
LINGO, TERMS AND ABBREVIATIONS
90-DAY REDEMPTION PERIOD - After the filing of the Notice of Default, the homeowner has 90 days to redeem by paying all past due.
ACH - Automatic Clearing House - a.k.a. "Check By Phone." Payment option A.S.A.P. offers to homeowners. By giving us their checking account and bank routing numbers, A.S.A.P. is able to withdraw funds electronically from their account. These payments are considered the same as a personal check, requiring 15 day hold before disbursement.
ADR - Alternative Dispute Resolution - A catchall term that describes a number of methods used to resolve disputes out of court, including negotiation, conciliation, mediation and the many types of arbitration. The common denominator of all ADR methods is that they are faster, less formalistic, cheaper and often less adversarial than a court trial. In recent years the term Alternative Dispute Resolution has begun to lose favor in some circles and ADR has come to mean Appropriate Dispute Resolution. The point of this semantic change is to emphasize that ADR methods stand on their own as effective ways to resolve disputes and should not be seen simply as alternatives to a court action.
AGENT - Someone authorized by another (principal) to act for or in place of the principal; one entrusted with another's business.
ARS - Asset Recovery Specialists - A collection company used to pursue personal obligation debts.
ARBITRATION - A non-court procedure for resolving disputes using one or more neutral third parties -- called the arbitrator or arbitration panel. Arbitration uses rules of evidence and procedure that are less formal than those followed in trial courts, which usually leads to a faster, less-expensive resolution.
ASSESSMENTS - These are the fees or dues payable by members of a homeowners' association. Amount is determined annually by the board of directors as part of the budgeting process. Assessments are usually due monthly, but can be quarterly, semi-annual, annual, etc.
ASSOCIATION - A non-profit corporation or unincorporated association created for the purpose of managing a common interest development.
BK/BANKRUPTCY - A legal proceeding that relieves you of the responsibility of paying your debts or provides you with protection while attempting to repay your debts. There are two types of bankruptcies -- liquidation, in which your debts are wiped out (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts. For both consumers and business, liquidation bankruptcy is called Chapter 7. For consumers, reorganization bankruptcy is called Chapter 13. Reorganization bankruptcy for consumers with an extraordinary amount of debt and for businesses is called Chapter 11. Reorganization bankruptcy for family farmers is called Chapter 12
BANKRUPTCY TRUSTEE - A person appointed by the court to oversee the case of a person or business that has filed for bankruptcy. In a consumer Chapter 7 case, the trustee's role is to gather the debtor's nonexempt property, liquidate it and distribute it proportionally to her creditors. In a Chapter 13 case, the trustee's role is to receive the debtor's monthly payments and distribute them proportionally to her creditors.
BOARD MEETING - Any congregation of a majority of the board members at the same time and place to hear, discuss or deliberate upon any item of business scheduled to be heard by the board, except those matters that may be discussed in executive session.
BOARD OF DIRECTORS (BOD) - The governing body of a corporation such as an association. The board is elected by the members of the association who elect the officers. The directors and officers have a duty to comply with the governing documents of the association and all applicable laws.
BYLAWS - The rules adopted for governing a corporation such as an association. The bylaws address such things as elections of both directors and officers, the holding of meetings, rights to notice and the powers of directors and officers.
CC&Rs - COVENANTS, CONDITIONS & RESTRICTIONS - The restrictions governing the use of real estate, usually enforced by a homeowners' association and passed on to the new owners of property. For example, CC&Rs may tell you how big your house can be, how you must landscape your yard or whether you can have pets. If property is subject to CC&Rs, buyers must be notified before the sale takes place.
CERTIFIED COPY - A copy of a document issued by a court or government agency guaranteed to be a true and exact copy of the original. Many agencies and institutions require certified copies of legal documents before permitting certain transactions. For example, a certified copy of a death certificate is required before a bank will release the funds in a deceased person's payable-on-death account to the person who has inherited them.
CHAPTER 7 BANKRUPTCY - The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your nonexempt property. Chapter 7 bankruptcy takes from three to six months, costs about $200, and commonly requires only one trip to the courthouse.
CHAPTER 13 BANKRUPTCY - The reorganization bankruptcy for consumers, in which you partially or fully repay your debts. In Chapter 13 bankruptcy, you keep your property and use your income to pay all or a portion of the debts over three to five years. The minimum amount you must pay is roughly equal to the value of your nonexempt property. In addition, you must pledge your disposable net income -- after subtracting reasonable expenses -- for the period during which you are making payments. At the end of the three-to five-year period, the balance of what you owe on most debts is erased.
COLLECTION POLICY / DQ POLICY - Associations are required to adopt a collection policy describing the association's policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments against its members. The collection policy must be annually delivered to the members not less than 30 days nor more than 90 days immediately preceding the beginning of the association's fiscal year. Civil Code §1365(e)
The policy must include the association's policy for imposing late charges and interest, the owner's right to dispute the delinquency, their right to internal dispute resolution (meet and confer), and their right to request alternative dispute resolution (ADR) with a neutral third party. Civil Code §1367
A.S.A.P. offers, as a free service, to review an HOA's CC&Rs and create a compliant DQ policy for them to distribute to their homeowners. A copy of the DQ policy is enclosed with our NOILN letter.
CONFORMED COPY - An exact copy of a document filed with a court. To conform a copy, the court clerk will stamp the document with the filing date and add any handwritten notations to the document that exist on the original, including dates and the judge's signature. A conformed copy may or may not be certified.
CTS - Cimarron Trustee Services: The foreclosure trustee company A.S.A.P. partners with to handle HOA foreclosures.
DAVIS-STIRLING ACT - The Davis-Stirling Common Interest Development Act is the common name of the portion of the California Civil Code beginning with section 1350 which governs condominium, cooperative, and planned unit development communities in California. It was enacted in 1985 by the California State Legislature.
DEED - A document that transfers ownership of real estate.
DEED IN LIEU (OF FORECLOSURE) - A means of escaping an overly burdensome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won't agree to accept the property, the homeowner can prepare a quitclaim deed that unilaterally transfers the homeowner's property rights to the lender.
DEED OF TRUST / TRUST DEED - A document wherein specific financial interest in the title to real property is held by a trustee, which holds it as security for a loan.
DEFAULT - A failure to perform a legal duty. For example, a default on a mortgage or car loan happens when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of the agreement. Default on a student loan occurs when you fail to repay a loan according to the terms you agreed to when you signed the promissory note, and the holder of your loan concludes that you do not intend to repay.
DISBURSING, DISBURSEMENT - The process of paying out and/or the money paid out to associations, management, other agents. Processing payments received from owners is a multi-step process and the term disbursement is used to refer to most of them. It's best to ask people to clarify what step they're referring to if you're unsure.
DISCHARGE (OF DEBTS) - A bankruptcy court's erasure of the debts of a person or business that has filed for bankruptcy
DISPUTE / MEET & CONFER - Homeowners sent to collections have the right to dispute the validity of the debt and to request a meeting with the board of directors to review their account. A.S.A.P. has an exclusive procedure called Meet & Confer that was developed to assist HOAs in handling homeowner disputes. There are important legal requirements and deadlines that must be followed when handling these disputes.
DQ - Abbreviation used for Delinquent and/or Delinquency
DQ POLICY / COLLECTION POLICY - Associations are required to adopt a collection policy describing the association's policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments against its members. The collection policy must be annually delivered to the members not less than 30 days nor more than 90 days immediately preceding the beginning of the association's fiscal year. Civil Code §1365(e)
The policy must include the association's policy for imposing late charges and interest, the owner's right to dispute the delinquency, their right to internal dispute resolution (meet and confer), and their right to request alternative dispute resolution (ADR) with a neutral third party. Civil Code §1367
A.S.A.P. offers, as a free service, to review an HOA's CC&Rs and create a compliant DQ policy for them to distribute to their homeowners. A copy of the DQ policy is enclosed with our NOILN letter.
ESCROW - When a property is being sold or refinanced the mortgage company establishes an escrow account to pay property tax and insurance during the term of the mortgage. A.S.A.P. provides Pay-off Demand(s) to the Title Company for full amount due on account.
FAIR DEBT COLLECTIONS & PRACTICES ACT (FDCPA) - A federal law that outlaws unfair debt collection practices, including lying, harassing, misleading and otherwise abusing debtors, by debt collectors working for collection agencies. The law does not apply to creditors collecting their own debts.
FORBEARANCE - Voluntarily refraining from doing something, such as asserting a legal right. For example, a creditor may forbear on its right to collect a debt by temporarily postponing or reducing the borrower's payments.
FORECLOSURE (F/C) - The forced sale of real estate to pay off a loan on which the owner of the property has defaulted.
GRANT DEED - A deed containing an implied promise that the person transferring the property actually owns the title and that it is not encumbered in any way, except as described in the deed. This is the most commonly used type of deed. Compare quitclaim deed.
HOA - HOMEOWNERS' ASSOCIATION - An organization comprising neighbors concerned with managing the common areas of a subdivision or condominium complex. These associations take on issues such as salting and sanding a subdivision when it snows and collecting dues from residents. The homeowners' association is also responsible for enforcing any covenants, conditions & restrictions that apply to the property.
INTEREST - A commission you pay a bank or other creditor for lending you money or extending you credit. An interest rate represents the annual percentage that is added to your balance. This means that if your loan or credit line has an interest rate of 8%, the holder adds 8% to the balance each year. More specifically, interest is calculated and added to your loan or credit line through a process called compounding. If interest is compounded daily, the balance will rise by 1/365th of 8% each day. If interest is compounded monthly, the balance will rise 1/12th of 8% at the start of each month.
JUDGMENT - A final court ruling resolving the key questions in a lawsuit and determining the rights and obligations of the opposing parties. For example, after a trial involving a vehicle accident, a court will issue a judgment determining which party was at fault and how much money that party must pay the other.
LENDER - Banks, financial institutions that holds mortgage on property
LENDER'S AGENT - Company that services mortgages on behalf of lender
LENDER COLLECTION - When Lender has foreclosed, collection activities are initiated against the Lender for their portion of debt.
LENDER FORECLOSURE - Lender has Initiated Foreclosure. A.S.A.P. monitors the activity.
LIEN - A recorded claim against a property, giving a creditor the right to grab a specific item of property if you don't pay a debt.
MEDIATION - A dispute resolution method designed to help warring parties resolve their own dispute without going to court. In mediation, a neutral third party (the mediator) meets with the opposing sides to help them find a mutually satisfactory solution. Unlike a judge in her courtroom or an arbitrator conducting a binding arbitration, the mediator has no power to impose a solution. No formal rules of evidence or procedure control mediation; the mediator and the parties usually agree on their own informal ways to proceed.
MEET & CONFER/DISPUTE - Homeowners sent to collections have the right to dispute the validity of the debt and to request a meeting with the board of directors to review their account. A.S.A.P. has an exclusive procedure called Meet & Confer that was developed to assist HOAs in handling homeowner disputes. There are important legal requirements and deadlines that must be followed when handling these disputes.
MORTGAGE - A loan in which the borrower puts up the title to real estate as security (collateral) for a loan. If the borrower doesn't pay back the debt on time, the lender can foreclose on the real estate and have it sold to pay off the loan.
NOD - Notice of Default - A notification given to a borrower stating that he or she has not made their payments by the predetermined deadline. It dictates that if the money owed (plus an additional legal fee) is not paid in a given time, the lender may choose to foreclose the borrower's property. Any other people whom may be affected by the foreclosure may also receive a copy of the notification.
NOILN - Notice of Intent to Lien - First letter sent by A.S.A.P. to homeowners informing them a lien will be recorded against their property if they do not pay in full or contact A.S.A.P. for payment arrangements within 35 days. This notice is required by law.
NOITP - Notice of Intent to Proceed Stage - A courtesy letter A.S.A.P. sends to homeowners who are "between stages" in that their account does not meet requirements to send NOIFC but they have not responded to previous letters.
NOPFC - Notice of Potential Foreclosure or Other Action (formerly known as NOIFC - Notice of Intent to Foreclose) - Letter sent by A.S.A.P. informing homeowner that foreclosure proceedings will begin if they do not pay in full or contact for payment arrangements within 30 days.
NORLN - Notice of Recorded Lien - Letter sent with a conformed copy of the Recorded Lien. This letter gives the owner another 30 days to remit payment in full or make payment arrangements before collection activities proceed.
NOS - Notice of Sale - The notice which a lender is required to give before foreclosure sale of property. Sale date is published once per week for three consecutive weeks prior to sale]
PAY-OFF DEMAND - Statement of account provided to escrow in order to receive payment when the property goes through escrow for a sale or refinance.
PERSONAL OBLIGATION - If a lender forecloses on a property without paying the previous owner's portion of the balance owed to the HOA, the debt becomes a Personal Obligation of the former owner. Traditional collection procedures can be used to pursue this type of debt. With authorization from the HOA Board, A.S.A.P. assigns these cases to ARS (Asset Recovery Specialists).
PP - Payment Plan
PP(#) - Payment Plan terms; # signifies monthly due date, i.e., PP15, payments are due to A.S.A.P. by the 15th; PPLDOM, payments are due on Last Day Of Month.
PPACH - Payment Plan ACH - Owner has pre-authorized A.S.A.P. to make automatic withdrawals for their payments on a recurring basis.
POPP - Personal Obligation Payment Plan.
QUIT CLAIM DEED - A deed that transfers whatever ownership interest the transferor has in a particular property. The deed does not guarantee anything about what is being transferred, however. For example, a divorcing husband may quitclaim his interest in certain real estate to his ex-wife, officially giving up any legal interest in the property. Compare grant deed.
RECORDING - The process of filing a copy of a deed or other document concerning real estate with the land records office for the county in which the land is located. Recording creates a public record of changes in ownership of all property in the state.
RESERVES - Funds set aside for repairs and replacements to be made by an association as determined by a reserve study.
RETURNED MAIL / SKIP TRACE LOCATE - [A.S.A.P. Has Received Returned Mail; All Returned Mail Is Logged]
RLN - Release of Lien - Recorded within 21 days of making Payment In Full
SECURED DEBT - A debt on which a creditor has a lien. The creditor can institute a foreclosure or repossession to take the property identified by the lien, called the collateral, to satisfy the debt if you default. Compare unsecured debt.
SHORT SALE (OF HOUSE) - A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (of foreclosure).
SMALL CLAIMS COURT - [Only If Foreclosure Is Not An Option; Association Or Management Attends Court.] A state court that resolves disputes involving relatively small amounts of money -- usually between $2,000 and $10,000, depending on the state. Adversaries usually appear without lawyers -- in fact, some states forbid lawyers in small claims court -- and recount their side of the dispute in plain English. Evidence, including the testimony of eye witnesses and expert witnesses, is relatively easy to present because small claims courts do not follow the formal rules of evidence that govern regular trial cases. A small claims judgment has the same force as does the judgment of any other state court, meaning that if the loser -- now called the "judgment debtor" -- fails to pay the judgment voluntarily, it can be collected using normal collection techniques, such as property liens and wage garnishments.
SPECIAL ASSESSMENTS - An assessment made usually for a special project or in response to a large unbudgeted expense.
TCS - Title Court Services - Courier service that takes documents to county recorder offices to be recorded.
TITLE - Evidence of ownership of real estate.
TITLE COMPANY - A company that issues title insurance.
TITLE INSURANCE - Insurance issued by a title company that protects a property owner against loss if it is later discovered that title is imperfect.
TRUST DEED / DEED OF TRUST - A document wherein specific financial interest in the title to real property is held by a trustee, which holds it as security for a loan.
TRUSTEE - The person who manages assets owned by a trust under the terms of the trust document. A trustee's purpose is to safeguard the trust and distribute trust income or principal as directed in the trust document.
TSG / TITLE SALE GUARANTEE REPORT - Lists all encumbrances on property in recording order. "First in Time, First in Line."
UNSECURED DEBT - A debt that is not tied to any item of property. A creditor doesn't have the right to grab property to satisfy the debt if debtor defaults. The creditor's only remedy is to sue the debtor and get a judgment.
|
|
|
|
