Glossary of foreclosure terms: L

late charge: Fee incurred for failure to make a required payment on time.

lawsuit: Legal action in a court of law.

letter of explanation (LOX): Letter from a borrower to a lender that gives reasons for failure to pay or other defaults on the loan.

liability: Unfulfilled financial obligation, such as a credit-card debt or loan balance.

lien: Recorded monetary encumbrance against property, such as a mortgage. Unless the new owner agrees to take them on, the seller must satisfy all liens to sell property.

lienholder: Party that is named as the beneficiary of a lien, for example the lender. Also known as a lienor.

liquidation bankruptcy: See Chapter 7.

lis pendens: Recorded document that states that a lawsuit is underway.

listing agent: Real estate agent who assists a property owner in preparing, selling, and completing the sale of a property. Seller's agent. See also selling agent.

listing agreement: Contract in which a property owner permits and directs a real estate agent to act as a listing agent.

loan servicer: Company that administers loans that it does not itself hold. Such a company might perform communications on behalf of the lender and oversee collection actions.

loan-to-value (LTV): Ratio of loan amount to property value. For example, a $100,000 property bought with a $25,000 down payment and $75,000 loan would have a 75% LTV ratio.

long-term debt: Debts that have lasted at least a year or are expected to last that long.

loss-mitigation department: Part of a lender or loan servicer set up to communicate and negotiate with borrowers who are in danger of default.

lying by commission: Stating an explicit untruth.

lying by omission: Implied untruth committed by leaving out information that should clearly be there. For example, trying to get a loan secured by a home that's just burned down without mentioning the fire would be lying by omission.