Common Foreclosure Terminology
An option given to lenders through an "acceleration" clause in the mortgage or
deed of trust requiring the borrower to pay the entire balance of the loan all
at once if their loan is in default.
A sworn statement in writing usually given while under oath or in the presence
of a notary.
The process in which a licensed or authorized person gives an estimate of
The difference between the increased value of the property and the original
The transfer of property to be held in trust or to be used for the benefit of
the creditors (lenders).
The offered amount for a property for sale at auction.
Certificate of Sale
A document given to the winning bidder at a foreclosure sale stating their
rights to the property once the borrowers redemption period has expired.
A title that is not burdened with defects.
A bid on behalf of the lender at a foreclosure sale. The bid amount must be less
than or equal to the balance of the loan in default.
A judicial decision.
A signed document that transfers ownership of property from one party to
Deed-in-lieu of Foreclosure
An instance where borrowers voluntarily convey their rights in a property to the
Deed of Trust
A three party security instrument conveying the legal title to real property as
security for the repayment of a loan. The three parties included in a deed of
trust are the borrower, lender and trustee.
A mortgage or deed of trust is said to be in default when the borrower fails to
make the payments as agreed to in the original promissory note.
A personal judgment against the borrower for the remaining balance on the loan
after a foreclosure sale.
The present right to possession with the right to acquire legal title once a
preceding condition has been met.
Fair Market Value
The price a property would sell for on the open market.
The forced sale of property pledged as security for a debt that is in default.
Free & Clear
Ownership of property free of all indebtedness.
A foreclosure that is processed by a court action.
A charge upon real or personal property for the satisfaction of a debt.
A formal description of real property sufficient to locate it by reference to
government surveys or approved recorded maps.
A person who lends money for temporary use on condition of repayment with
interest (i.e., the bank, mortgage company, etc.).
A recorded notice of pending lawsuit.
A written pledge of property that is used as security for the repayment of a
The non-judicial process of foreclosure is used when a power of sale clause
exists in a mortgage or deed of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower pre-authorizes the sale of
property to pay off the balance on a loan in the event of their default.
A public officer licensed by the state to attest to and certify the validity of
signatures of others. A notary is often referred to as a notary public.
Notice of Sale
A notice giving specific information about the loan in default and the
proceedings about to take place. This notice must be recorded with the county
where property is located and advertised as stated in the security document or
as dictated by state law.
Property other than real property consisting of things temporary or movable.
To publish, announce or advertise by physically attaching a notice to an object.
Postponement means to put off to a later time. In the case of a foreclosure
sale, this is generally done by announcement at the original sale or by posting
notices establishing the new date and time the foreclosure sale will take place.
Right of Redemption
A borrower's right to reacquire property lost due to a foreclosure.
Request for Notice
A recorded document requiring a trustee send a copy of a Notice of Default or
Notice of Sale concerning a specific deed of trust in foreclosure to the person
who filed the document.
The purchase of a property with an existing lien against the title without
assuming any personal liability for the liens payment.
The instrument that is evidence of a person's right in real property (i.e., a
A neutral party who advertises the foreclosure property for sale and conducts
the auction to sell said property to the highest bidder.
An auction of real property conducted by a trustee. Also known as a Sheriff's
A recorded bid placed after a foreclosure sale has ended that is higher than the
highest bid received at the actual foreclosure sale.
An order or mandatory process in writing issued in the name of a court or
judicial officer commanding the person to whom it is directed to perform or
refrain from performing a specified act.