The process terms
- Acceleration — the lender declares the entire loan balance due at once, not just the missed payments. Triggered by default; reversible by reinstatement or workout
- Default — failure to meet the loan's terms, usually missed payments
- Notice of Default (NOD) — the recorded document that formally starts many non-judicial foreclosures and opens a cure window
- Lis pendens — 'suit pending': the public filing that announces a judicial foreclosure case has begun
- Notice of Trustee's Sale / Notice of Sale — the document that sets an actual auction date
- Judicial foreclosure — foreclosure through a court lawsuit, with service, answers, and a judge
- Non-judicial foreclosure — foreclosure by a trustee under the deed of trust's power of sale, on statutory clocks, no courtroom
- Trustee — the neutral third party who administers a non-judicial foreclosure and conducts the sale
- Sheriff's sale / trustee's sale — the auction itself
- Confirmation — court approval of a completed sale, required in several judicial states
The money terms
- Arrears — the total missed payments, interest, and fees you're behind
- Reinstatement — paying all arrears and fees to bring the loan current and stop the foreclosure
- Payoff — the amount that retires the entire loan, not just the arrears
- Equity — market value minus everything owed against the home; the money at stake in every decision
- Deficiency — the shortfall when a sale brings less than the debt; in many states the lender can sue for it
- Deficiency waiver — written language releasing you from that shortfall; the clause that makes short sales and deeds-in-lieu safe
- Surplus funds — the overage when an auction brings more than the debt; it belongs to the former owner and must be claimed
- Escrow — the account holding your taxes and insurance; shortages here raise payments and trigger defaults surprisingly often
The workout terms
- Loss mitigation — the servicer department and process for foreclosure alternatives; the phrase that gets you past collections
- Forbearance — an agreement pausing or reducing payments during a hardship
- Loan modification — a permanent change to loan terms (rate, term, balance treatment) to make the payment affordable
- Repayment plan — arrears spread over months on top of the regular payment
- Partial claim — an interest-free subordinate lien (FHA and others) that moves arrears to the loan's end
- Deferral — paused payments moved to the end of the loan term
- Short sale — selling for less than the debt with lender approval, ideally with a deficiency waiver
- Deed-in-lieu — voluntarily transferring the property to the lender on negotiated terms instead of completing foreclosure
- Cash for keys — relocation money paid for delivering the property clean and on schedule
- Dual-tracking — a servicer advancing foreclosure while a complete workout application is pending; broadly restricted by federal rule
- Automatic stay — the instant legal freeze on foreclosure and collections when a bankruptcy is filed
- Redemption — the state-law right to reclaim the property after the sale, where it exists, usually by paying the sale price