Foreclosure Terminology

What's a Foreclosure Trustee?

A foreclosure “trustee” is the party who typically handles a nonjudicial foreclosure.

What Does It Mean to “Default” on a Mortgage Loan?

The terms of the mortgage or deed of trust you signed when getting your home loan usually define what constitutes default.

What Does “Loss Mitigation” Mean?

“Loss mitigation” is what the mortgage-servicing industry calls the process where borrowers and their loan servicer work together to avoid a foreclosure.

What Is a Power of Sale Foreclosure?

If you have a power of sale provision in your loan contract, the lender can foreclose without going to court.

Understanding Real Estate Owned (REO) Properties

An REO (Real Estate Owned) property is a home the bank owns after a foreclosure or deed in lieu.

What Is a Mortgage-Backed Security?

"Securitization" is a process that takes individual mortgage loans, bundles them, and turns them into marketable mortgage-backed securities that can be bought and sold.

What Is an Acceleration Clause?

In a mortgage contract, an "acceleration clause" is a provision that permits the lender to demand that the borrower repay the entire loan after a default.

What Is Strict Foreclosure?

A couple of states allow lenders to foreclose by court order, without holding a sale.

What Is Summary Judgment in a Foreclosure?

If you respond to a foreclosure lawsuit, but don’t bring up any valid issues, the foreclosing party will likely ask the court for summary judgment.

What Is a Sheriff's Sale?

In a sheriff's sale, law enforcement sells off properties that are in the end stage of foreclosure.

Get Help Avoiding Foreclosure: Using a HUD-Approved Housing Counselor

HUD-approved housing counselors will work with you, free of charge, to help you avoid foreclosure.

What Is Reforeclosure?

A "reforeclosure" is sometimes necessary to eliminate title issues missed in the first foreclosure.

What’s a Default Judgment in a Foreclosure?

If you don’t respond to a foreclosure lawsuit, the lender will ask the court for a default judgment.

What's "Cash for Keys" in a Foreclosure?

If you lose your home to a foreclosure sale, the new owner might offer you a lump sum to voluntarily move out. This kind of transaction is called “cash for keys.”

What's the Difference Between a Breach Letter and an FDCPA Validation Letter?

If you're facing a foreclosure, you might get a breach letter or a FDCPA validation letter. Learn the difference between the two.

What's the difference between a complaint, summons, and lis pendens in a foreclosure lawsuit?

Learn about the complaint, summons, and lis pendens in a foreclosure lawsuit.

What's the difference between a home inspection and a property inspection?

If you fall behind in your mortgage payments, your lender may order monthly property inspections to ensure that its interest in the property is protected. This is different than the home inspection that was completed when you purchased the property. Keep reading to learn the difference between a home

What's the difference between a notice of default and notice of sale in foreclosure?

In a nonjudicial foreclosure, you might get both a notice of default and notice of sale. Learn more about these documents.

What's the Difference Between Reinstatement and Payoff in Foreclosure?

You can prevent a foreclosure by reinstating your mortgage or paying off the loan. Learn the difference between these two options.

What’s a Debt-to-Income (DTI) Ratio?

If you’re applying for a loan modification, your debt-to-income ratio could be a factor.

What Does Pre-Foreclosure Mean?

How long is the pre-foreclosure process, and how does it work? It depends on state law and other factors.

What Does It Mean to “Default” on a Mortgage Loan?

The terms of the mortgage or deed of trust you signed when getting your home loan usually define what constitutes default.

What's a Mortgage Servicer?

Mortgage servicing companies handle borrowers' accounts. Find out if you can change your mortgage loan servicer.

Qualified Written Requests in Foreclosure: The Mortgage Servicer's Duties

Qualified written requests can be a helpful tool for borrowers in foreclosure.

What Is a Mortgage-Backed Security?

"Securitization" is a process that takes individual mortgage loans, bundles them, and turns them into marketable mortgage-backed securities that can be bought and sold.

What Is MERS?

MERS registers and tracks assignments of mortgages and servicing rights, avoiding the costs of having to record each loan transfer.

What Is Fannie Mae or Freddie Mac?

Fannie Mae and Freddie Mac are government-sponsored enterprises that buy mortgage loans from banks and other lenders.

Credit Bidding in a Foreclosure

At a foreclosure sale, the foreclosing lender usually makes a bid on the property using what’s called a “credit bid.”