Glossary
Foreclosure terms in plain English
The words on your letters and court papers, each explained in a sentence or two, with a link to the page that covers it.
Reviewed October 13, 2026. General information, not legal, tax or financial advice.
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- 120-day rule
- The federal rule that, in most cases, a servicer may not make the first notice or filing for a foreclosure until you are more than 120 days behind. See your federal rights.
A
- Acceleration
- When the lender demands the whole loan balance at once instead of only the missed payments. It usually follows a breach letter that was not cured.
- Appeal
- A request to have a denied loan modification reviewed again by different staff. You have 14 days to appeal if your complete application arrived 90 or more days before a sale. See your federal rights.
- Arrears
- The total of the payments you have missed, plus any fees and costs added to them.
- Automatic stay
- The court order that takes effect the moment a bankruptcy case is filed and stops collection, including a foreclosure sale. The lender can ask the court to lift it. See Chapter 13.
B
- Borrower
- The person who signed the loan. A confirmed successor in interest is treated as a borrower under the federal servicing rules.
- Breach letter
- A letter from the servicer saying you have broken the loan terms, usually by missing payments, and giving you a date to catch up before it calls the whole loan due. See breach letter.
C
- Cash for keys
- An offer of money from the new owner after a foreclosure sale in return for moving out by a set date and leaving the home in good condition. See cash for keys offer.
- Certificate of sale
- A document given to the winning bidder at some foreclosure sales, used in states where the borrower has time to buy the home back before a deed is issued. See certificate of sale.
- Chapter 7 bankruptcy
- A bankruptcy that wipes out many debts. It pauses a foreclosure for a time, but it does not remove the mortgage lien, so the lender can still foreclose once the stay ends. See Chapter 13, which covers both.
- Chapter 13 bankruptcy
- A bankruptcy with a three to five year repayment plan. It stops a foreclosure sale and lets you catch up on missed payments over the plan while making your regular payment. See Chapter 13.
- Complete application
- A loss mitigation application for which the servicer has received everything it asked for. Most federal protections depend on when the servicer receives it. See your federal rights.
- Cure
- To fix a default, usually by paying everything that is past due. See reinstatement.
D
- Deed in lieu of foreclosure
- An agreement to give the home to the lender instead of going through a foreclosure. See deed in lieu.
- Deed of trust
- The document, used in many states in place of a mortgage, that makes the home security for the loan. It usually names a trustee who can sell the home without a court case if you default.
- Default
- Not doing what the loan requires, most often not making payments.
- Default judgment
- A court ruling against you because you did not answer a lawsuit in time. In a court foreclosure it lets the lender move toward a sale. See summons and complaint.
- Deficiency
- The amount still owed when a foreclosure sale brings in less than the debt. Whether the lender can collect it depends on your state. See the deficiency page for your state.
- Deficiency judgment
- A court order making you personally liable for a deficiency. See deficiency letter.
- Delinquency
- Being behind on payments. Under the federal rules it starts on the date a payment is due and unpaid and lasts until nothing is past due. See missed a mortgage payment.
- Dual tracking
- When a servicer moves a foreclosure forward while it is still reviewing your application for help. Federal rules limit it if your complete application arrives more than 37 days before a sale. See your federal rights.
- Due-on-sale clause
- A loan term that lets the lender demand the whole balance if the home is sold or transferred without its consent. Federal law protects some family transfers. See selling before foreclosure.
E
- Early intervention
- The federal rule that makes a servicer try to reach you by phone by day 36 of being behind and write to you by day 45. See missed a mortgage payment.
- Equity
- What your home is worth minus what you owe on it.
- Escrow
- The account your servicer uses to pay property taxes and insurance from part of your monthly payment. See escrow shortage notice.
- Eviction
- The legal process a new owner must use to remove someone from a home after a foreclosure sale. See notice to vacate.
F
- Fannie Mae and Freddie Mac
- Two companies that own or guarantee most conventional mortgages and set the rules servicers follow on those loans. See Fannie Mae and Freddie Mac loans.
- FHA loan
- A mortgage insured by the Federal Housing Administration, part of HUD. FHA sets the options the servicer must review. See FHA loans.
- Flex Modification
- Fannie Mae's main loan modification, which aims to lower the principal and interest payment by about 20 percent. See Fannie Mae and Freddie Mac loans.
- Forbearance
- An agreement to lower or pause your payments for a set time. The missed amounts are still owed afterward. See forbearance.
- Force-placed insurance
- Insurance the servicer buys and charges to you when it believes your home is not insured. See force-placed insurance.
- Foreclosure
- The legal process a lender uses to have a home sold when the mortgage is not paid. See what foreclosure is.
- Foreclosure consultant
- A person or company that offers, for a fee, to help stop a foreclosure. Federal law bans most upfront fees, and many states have their own laws. See rescue scams.
- Foreclosure mediation
- A meeting, run by a court or a state program, where you and the lender try to reach an agreement with a neutral person. Only some states have it. See mediation notice.
- Foreclosure sale
- The auction of the home, held by a trustee, a sheriff or a court officer. You own the home until it happens.
H
- Hardship letter
- A short letter to your servicer explaining why you fell behind and what has changed. Use the free hardship letter template.
- HECM
- Home Equity Conversion Mortgage, the federally insured reverse mortgage. See reverse mortgage foreclosure.
- HELOC
- Home equity line of credit: a line of credit secured by your home. The federal 120-day rule does not cover it. See second mortgages and HELOCs.
- HOA lien
- A claim on your home by a homeowners or condo association for unpaid dues. In many states the association can foreclose on it. See HOA lien notice.
- HUD-approved housing counselor
- A counselor at an agency approved by HUD. Help with a late mortgage or a foreclosure is free. See what a HUD housing counselor does.
I
- Investor
- The owner of your loan, which may be different from the company you pay. The investor's rules decide which options you can get. See help by loan type.
J
- Judicial foreclosure
- A foreclosure that goes through court: the lender sues, and a judge must approve the sale. See judicial vs nonjudicial foreclosure.
- Junior lien
- A lien that is paid after another one if the home is sold, such as a second mortgage. See second mortgages and HELOCs.
L
- Lien
- A legal claim on your home that secures a debt. A mortgage, a tax debt and unpaid association dues can each be a lien.
- Lis pendens
- A notice recorded in the public records that a lawsuit affecting the property has been filed. See lis pendens.
- Loan modification
- A permanent change to your loan's terms, such as the rate or the length, to make the payment affordable. See loan modification.
- Loss mitigation
- The servicer's term for every way of avoiding a foreclosure, from a repayment plan to a short sale. Asking to "apply for loss mitigation" covers all of them. See your options.
M
- Mortgage
- The document that makes your home security for the loan. People also use the word for the loan itself.
- Mortgage servicer
- The company you send your payments to. It handles the loan day to day, your application for help, and usually the foreclosure.
N
- Nonjudicial foreclosure
- A foreclosure with no lawsuit: a trustee sends notices and then sells the home. See judicial vs nonjudicial foreclosure.
- Notice of default
- In many states without court foreclosures, the first formal notice that a foreclosure has started. See notice of default.
- Notice of error
- A letter telling your servicer it made a mistake and asking it to fix it. The servicer has federal deadlines to answer. See notice of error and information request.
- Notice of intent to foreclose
- A warning letter some states require before a foreclosure can start. See notice of intent to foreclose.
- Notice of sale
- The notice that gives the date, time and place of the foreclosure sale. See notice of sale.
P
- Partial claim
- On FHA and VA loans, an interest-free second loan that covers what you are behind and is repaid when you sell, refinance or pay off the home. See payment deferral and partial claim.
- Payment deferral
- On Fannie Mae and Freddie Mac loans, moving missed payments to the end of the loan with no interest. See payment deferral and partial claim.
- Payoff statement
- A statement of the exact amount needed to pay the loan in full on a given date. It is more than your current balance. See payoff and reinstatement quote.
- Power of sale
- A clause in a deed of trust or mortgage that lets a trustee sell the home without a court case after a default.
- Pre-foreclosure
- Not a legal term. People use it for the time between falling behind and the foreclosure sale. You still own the home and can use every option. See what foreclosure is.
- Pre-foreclosure sale
- FHA's name for a short sale.
R
- Redemption
- Buying your home back by paying what is owed. Some states allow it for a period after the foreclosure sale, and some only before. See the after-the-sale page for your state.
- Reinstatement
- Stopping a foreclosure by paying everything you are behind, plus fees and costs, in one payment. See reinstatement.
- Repayment plan
- An agreement to pay your regular payment plus an extra amount each month until you are caught up. See repayment plan.
- Request for information
- A letter asking your servicer for information about your loan, such as who owns it. The servicer has federal deadlines to answer. See notice of error and information request.
- Reverse mortgage
- A loan for older homeowners with no monthly payment that comes due when the last borrower dies or moves out, or when taxes or insurance are not paid. See reverse mortgage foreclosure.
S
- SCRA
- The Servicemembers Civil Relief Act. It limits foreclosure during military service and for one year after, for a mortgage taken out before service. See military protection.
- Second mortgage
- A loan secured by your home that is paid after the first mortgage if the home is sold. Its lender can sometimes foreclose even if the first mortgage is current. See second mortgages and HELOCs.
- Servicing transfer
- When a different company takes over collecting your payments. Your protections and deadlines carry over. See servicing transfer notice.
- Sheriff's sale
- A foreclosure auction run by the county sheriff, used in many states where foreclosures go through court. See notice of sheriff's sale.
- Short sale
- Selling the home for less than you owe, with the lender's approval. See short sale.
- Substitution of trustee
- A recorded document that replaces the trustee named in your deed of trust, often shortly before a foreclosure. See substitution of trustee.
- Successor in interest
- Someone who received the home from the borrower, for example after a death or in a divorce. Once confirmed by the servicer, they are treated as a borrower. See inherited homes.
- Summons and complaint
- The court papers that start a foreclosure lawsuit. The summons gives your deadline to answer. See summons and complaint.
- Surplus funds
- Money left over when a foreclosure sale brings in more than the debt and costs. After other liens are paid, it can belong to you. See surplus funds notice.
T
- Tax sale
- A sale of the home, or of a lien on it, by the local government for unpaid property taxes. It is a different process from a mortgage foreclosure. See tax sale notice.
- Trial payment plan
- A few months of test payments you must make on time before a loan modification or similar option becomes permanent.
- Trustee
- In a nonjudicial foreclosure, the person or company named in the deed of trust that sends the notices and holds the sale. Not the same as a bankruptcy trustee.
U
- USDA loan
- A rural home loan made or guaranteed by the U.S. Department of Agriculture. See USDA loans.
V
- VA loan
- A mortgage guaranteed by the Department of Veterans Affairs. VA has its own staff who review loans in trouble. See VA loans.
W
- Writ of possession
- A court order that lets the sheriff remove the people living in a home after a foreclosure and eviction case. See writ of possession.
Z
- Zombie second mortgage
- An old second mortgage you thought was forgiven or paid off that a debt collector tries to collect years later. See second mortgages and HELOCs.
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