Distressed Real Estate Glossary

Value opinion produced by a broker for institutional clients.

A value estimate prepared by a licensed broker, used by lenders and asset managers for disposition, loss-mitigation, and portfolio decisions. Faster and cheaper than an appraisal but cannot be used as primary basis for consumer mortgage origination over $250K.

California Bureau / Department of Real Estate.

The state agency that licenses and regulates real estate brokers and salespersons in California. Handles license issuance, complaints, and enforcement actions.

IRS form reporting cancellation of debt income.

When a lender forgives debt in a short sale, the lender issues Form 1099-C reporting the forgiven amount as income. Most short-sale sellers exclude the income under insolvency or qualified principal residence exclusions.

Broker's value estimate based on comparable sales.

A pricing analysis prepared by a broker using recent sold comps, active listings, and local market trends. Less formal than a BPO and not delivered to institutional clients in the same templated form.

Court hearing where a probate sale is confirmed and overbid.

When a probate sale requires court confirmation (limited IAEA or contested estates), the court holds a hearing where the accepted offer is presented and any qualified bidder may overbid in open court using a statutory formula.

Marital home sale conducted under family-law order.

When spouses cannot agree, the family-law court can order the sale, appoint the broker, set pricing parameters, and require periodic activity reports. Authority flows from the order, not from either spouse.

Voluntary transfer of title to the lender to avoid foreclosure.

An alternative to foreclosure where the borrower deeds the property to the lender in exchange for release of the loan obligation. Less common than short sales but useful when no buyer is available.

California's term for divorce.

California uses 'dissolution of marriage' instead of 'divorce' in family-law procedure. The terms are interchangeable in everyday use.

California's anti-deficiency statute for short sales.

California Code of Civil Procedure §580e prohibits a lender from pursuing a deficiency judgment against a borrower after approving a short sale on a 1–4 unit residential property. Applies to both purchase-money and refinanced loans, and to junior liens that approve the short payoff.

Court-appointed signer when a party refuses to sign.

When a spouse refuses to sign documents required to complete a court-ordered sale, the court can appoint an elisor — typically the court clerk — to sign on that spouse's behalf, allowing the transaction to close.

Common platform for REO and short sale task management.

Cloud-based platform used by lenders and servicers to assign, track, and report on REO and loss-mitigation tasks. Brokers receive assignments, upload deliverables, and submit status updates through Equator.

Neutral third party that holds funds and documents at close.

An independent escrow company holds the buyer's funds, the deed, and other transaction documents while contingencies are removed and conditions met. Disburses funds and records the deed at close.

Borrower's written explanation of why they can't pay.

A one-page letter to the lender stating the specific cause of financial hardship, when it began, and why the borrower cannot continue making payments. The first document loss-mitigation reviewers read in a short sale package.

Petition to bring an unfunded asset into a trust.

When a settlor created a trust but never deeded a property into it, a §850 (Heggstad) petition asks the court to confirm the property belongs to the trust — sometimes avoiding full probate.

California law letting PRs act without prior court approval.

Probate Code §§10400–10592 authorize a personal representative to take most administrative actions — including selling real property under full authority — without first obtaining a court order. Granted as 'full' or 'limited' authority in the Order for Probate.

Court document granting authority to administer an estate.

Issued by the probate court after the appointment hearing, Letters Testamentary (with a will) or Letters of Administration (without a will) authorize the personal representative to act for the estate. Title companies typically require Letters dated within 60 days of close.

Lender department that reviews short sales and modifications.

The internal lender team responsible for evaluating alternatives to foreclosure — short sales, loan modifications, forbearance, and deed in lieu. Every short sale package routes through loss mitigation.

Broker-shared database of properties for sale.

Regional cooperative database where listing brokers publish properties for other brokers to access on behalf of buyers. The primary marketing channel for nearly every residential transaction in California.

Written agreement resolving issues in a dissolution.

The contract between divorcing spouses settling property division, support, and custody. The MSA typically directs how proceeds from a marital home sale are disbursed.

Recorded notice that starts the California foreclosure clock.

A Notice of Default is recorded by the trustee with the county after the borrower has been delinquent — typically 90+ days. The recording starts the statutory minimum 90-day waiting period before a Notice of Trustee Sale can be recorded.

Notice that bypasses court hearing under full IAEA authority.

Under full IAEA authority, the PR sends a NOPA to all interested parties before a sale closes. If no one objects within 15 days, the transaction proceeds without court hearing.

Mandatory trust notice to beneficiaries after a settlor's death.

Probate Code §16061.7 requires the trustee to serve a written notice on all beneficiaries and heirs within 60 days of the settlor's death. The notice triggers a 120-day window to contest the trust.

Recorded notice setting the foreclosure auction date.

Recorded after the 90-day NOD period, the NOTS sets the trustee sale date — at least 21 days out — and is published in a local newspaper for three consecutive weeks. Reinstatement rights end 5 business days before sale.

Open-court bidding at a probate confirmation hearing.

At confirmation, anyone may bid against the accepted offer. The minimum first overbid is the accepted price + 10% of the first $10,000 + 5% of the balance. Successful overbidder takes the contract on the same terms.

Person appointed by the court to administer an estate.

The executor (named in the will) or administrator (when there's no will) appointed by the probate court to manage and distribute the decedent's estate. Holds fiduciary duties to heirs and creditors.

Petition for court instructions on trust administration.

Probate Code §17200 lets a trustee or beneficiary petition the court for guidance on virtually any aspect of trust administration — confirming trusteeship, approving a sale, settling an accounting, or construing trust language.

Court-appointed appraiser for non-cash estate assets.

A neutral third-party appraiser appointed by the court to value real property and other non-cash assets. The Referee's value sets the floor for sale price under the 90% rule on confirmation sales.

Right to recover separate-property contributions to community assets.

California Family Code §2640 entitles a spouse to be reimbursed for separate-property contributions to the acquisition or improvement of a community asset — most often, the marital home — without interest or appreciation, taken off the top before division.

Curing the default by paying all arrears plus fees.

Bringing the loan current by paying all past-due payments, late fees, and trustee costs. Available throughout the foreclosure process up to 5 business days before the trustee sale.

Voluntary vacate agreement with a cash payment to occupant.

An agreement between the new owner (typically a lender) and an existing occupant in which the occupant agrees to vacate by a specific date in exchange for a cash payment. Almost always faster, cheaper, and cleaner than unlawful detainer.

Property owned by a lender after foreclosure.

When no third party bids at the trustee sale, the property reverts to the lender. The asset becomes 'real estate owned' — held on the lender's books pending disposition through a brokerage.

Sale where the lender accepts less than the loan balance.

A negotiated sale in which the lender agrees to release the lien for less than what's owed on the mortgage. Typically pursued when the borrower has a documented hardship and cannot continue making payments.

Marital home sale by mutual agreement of both spouses.

When both spouses agree to sell, the listing runs under a written stipulation or the MSA. Both spouses sign the listing, price changes, and any offers — broker treats both as joint clients.

Written change in the character of marital property.

An express written agreement converting separate property to community property (or vice versa). Required to validly waive a §2640 reimbursement claim — casual statements or course of conduct don't qualify.

Legal arrangement that holds property outside probate.

A revocable or irrevocable trust holds title to property and passes it to named successor trustees on the settlor's death without probate court involvement — assuming the trust was properly funded during the settlor's lifetime.

Public auction at the end of California foreclosure.

The non-judicial foreclosure auction held at the courthouse steps (or location specified in the NOTS). Highest bidder takes title via Trustee's Deed Upon Sale. If no third party bids, the property reverts to the lender as REO.

Deed transferring title at the trustee sale auction.

The deed recorded after a trustee sale, transferring title from the foreclosing borrower to the auction's highest bidder — or to the foreclosing lender when no third party bids.

California's eviction lawsuit.

The legal proceeding to remove an occupant who refuses to vacate. Typically takes 45–90 days uncontested, or 90–180+ days contested. Relocation assistance is almost always faster and cheaper.