When Ward Lending files a foreclosure lawsuit, a notice is recorded in the land records to warn future buyers that the property is subject to pending litigation. What is that notice called?
Correct Answer
A) Lis pendens
A lis pendens is the recorded notice that a lawsuit affecting title to the described property is pending. Once it is recorded, anyone who buys or lends against the property takes subject to the outcome of that suit, which is exactly the warning the facts describe. The other recorded instruments in a default file serve different purposes: one announces that the borrower is behind, one announces the date and place of a nonjudicial sale, and one announces that the debt has been paid off.
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Related Topics & Key Terms
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Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
More Financing Questions
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