The foreclosure world runs on jargon. Here are the terms you will meet in notices, court papers and listings, defined in plain English.
Acceleration
The lender’s demand, allowed by most mortgages after default, that the entire loan balance — not just the missed payments — be paid. A breach letter usually warns that acceleration is coming.
Arrears
The total amount past due: missed payments, late fees, and sometimes lender-paid taxes, insurance and legal costs.
Auction / Trustee’s Sale
The public sale of the property, conducted by a trustee, sheriff or online platform, to the highest bidder.
Breach Letter
The notice the lender must usually send before accelerating the loan, stating the default and giving a deadline (often 30 days) to cure it.
Cash for Keys
An agreement where the lender (or buyer) pays the occupant to move out by an agreed date and leave the property in good condition, instead of going through eviction.
Deed in Lieu of Foreclosure
The borrower voluntarily transfers the property to the lender to satisfy the debt and avoid a completed foreclosure.
Default
Failure to meet the loan’s terms — most often, missed payments. Also the legal state a loan is in once the borrower is behind.
Deficiency
The amount still owed after a foreclosure sale if the sale price was less than the debt. In some states the lender can sue for it (a deficiency judgment); others restrict or ban it, especially after non-judicial sales of owner-occupied homes.
Equity
The part of the home’s value the owner actually owns: market value minus everything owed against it.
Forbearance
A servicer agreement to temporarily reduce or pause payments. The amounts are repaid later; they are not forgiven.
Foreclosure
The legal process by which a lender forces the sale of a property securing a defaulted loan.
Judicial Foreclosure
Foreclosure conducted through a court lawsuit, required in roughly half the states.
Lis Pendens
“Suit pending” — a recorded notice that a property is the subject of a lawsuit; how judicial foreclosure becomes public record.
Loan Modification
A permanent change to loan terms (rate, term, balance structure) to make payments affordable and cure the default.
Loss Mitigation
The umbrella term for servicer workout options: reinstatement, repayment plans, forbearance, modification, short sale and deed in lieu.
Non-Judicial Foreclosure
Foreclosure conducted by a trustee under a power-of-sale clause, without a court case, where state law allows it.
Notice of Default (NOD)
The recorded notice that formally starts non-judicial foreclosure, stating the default and the amount needed to cure.
Notice of Trustee’s Sale (NOTS)
The recorded notice setting the date, time and place of the auction, published after the reinstatement period expires.
Pre-Foreclosure
The period between the first formal notice (NOD or court filing) and the auction, when the owner can still cure, work out, or sell the home.
Redemption Period
In some states, a window after the sale during which the former owner can reclaim the property by paying the sale price plus costs and interest.
Reinstatement
Curing the default by paying all arrears, fees and costs before the deadline, restoring the loan to normal status.
REO (Real Estate Owned)
Property the lender took back at auction and now owns and resells.
Servicer
The company that actually collects your payments and manages the loan day to day — often not the company that owns the loan.
Short Sale
A sale for less than the amount owed, with the lender’s approval, before foreclosure completes.