Glossary of foreclosure terms: C
call the loan: Lender action demanding payment of all money owed, usually under the terms of an acceleration clause or demand clause.
cap: The highest amount allowed for a loan fee or interest rate, expressed either as dollars or percentage rate. Also known as ceiling. No relation to cap rate, an abbreviation for the investor's term capitalization rate.
capital gain: Profit received from the sale of a capital asset such as a home. Capital gains are typically taxed at a 15 percent rate.
capital gains exemption: Law that prevents taxes on up to $250,000 of capital gains when a home is sold, as long as the owner has used it as a primary residence for 24 months over the past five years. For married couples, the exemption is good for $500,000 of capital gains.
cash reserve: Money a property owner has readily available for expenses such as maintenance and improvements.
cash-out refinance: New loan that gives the borrower cash in addition to paying off the old loan. For example, let's say a home is worth $200,000 and has $120,000 of outstanding loans. A cash-out refinance for $150,000 would pay off the old loan and put $30,000 (minus fees) into the owner's pocket.
ceiling: See cap.
certificate of sale: Document given to the winner bidder at a judicial foreclosure sale. The new owner doesn't have full rights to the property until after the redemption period has passed, at which time a sheriff's deed is issued. See also trustee's deed.
Certified Public Accountant (CPA): Professional who has passed certain courses and tests to gain expertise in accounting. Some financial functions such as certain kinds of audits can only be done by a CPA.
Chapter 7: Part of the U.S. Code (Title 11) that describes a liquidation bankruptcy, where most assets of value are sold to pay creditors. Such bankruptcies are colloquially called Chapter 7 bankruptcies.
Chapter 13: Part of the U.S. Code (Title 11) that describes a reorganization bankruptcy, where the court assigns a trustee to oversee a rearrangement of the debtor's finances without requirement that assets be sold to pay creditors. Such bankruptcies are colloquially called Chapter 13 bankruptcies.
check fee: Money charged by a credit card company for use of a credit card check.
clause: Part of a contract.
comparable property (comp): Property similar to the subject property in location, size, condition, and amenities. Recently sold comps are a valid source for determining the likely value of the subject property.
comparative market analysis (CMA): Report produced by a real estate agent that lists recently sold comparable properties and describes other conditions that are likely to affect the sale value of a property.
complaint: Legal filing that initiates a lawsuit.
compromise sale: Short sale of a home with a VA-backed loan. The Department of Veterans Affairs (VA) uses this term and imposes certain requirements for short sale of such a property.
consolidate (debt consolidation): Borrowing money from a single source to pay off multiple lenders.
constructive notice: Announcement made by filing papers in the county Recorder's office. While no other parties are notified directly, these filings are open for inspection and are part of the public record. See also actual notice.
cost-benefit analysis: Process of determining whether an action or situation is worthwhile by comparing its costs with expected benefits gained.
costs of sale: Expenses that are part of selling a property, which could include agent commissions, repairs, staging, government filings, transfer taxes, title work, attorney and escrow fees, and many other items.
credit card check: Document issued by a credit card company that allows the borrower to draw on a card's credit by filling out a check. These checks can be used anywhere personal checks are accepted, and are charged finance and check fees according to the credit-card agreement.
creditor: Party to whom someone owes money.
