Foreclosure terms explained

Deed in lieu of foreclosure. An agreement in which a homeowner signs the property over to the lender instead of foreclosure. Whether any remaining debt is released depends on the agreement.

Deed of trust. In many states the loan is secured by a deed of trust rather than a mortgage. Those states often allow a sale without a court case.

Default. Not doing something the loan papers or the court require. On a loan it usually means missed payments, and in a court case, no response in time.

Default judgment. A judgment a court can enter against a party who did not respond by the deadline. In a foreclosure that means no answer was filed.

Deficiency judgment. A money judgment for the part of the debt that the sale did not cover. Some states allow them, some limit them, some bar them.

Docket. The court's list of everything filed in a case, in date order. Many courts publish dockets online, though not every county does.

Forbearance. A written agreement with a servicer to pause or reduce payments for a set period. It is not forgiveness: the paused amounts still have to be dealt with.

Mortgage. The paper that gives a lender a claim against the property as security for the loan. It is recorded in the county land records.

Motion. A written request asking a court to do something. A foreclosure file often holds several, from either side.

Motion to dismiss. A written request asking the court to end a case. The grounds are technical, they differ by state, and they usually have to be raised early.

Motion to vacate under CPLR 5015. In New York, a written request asking a court to undo a judgment that has already been entered, in the limited situations that statute allows. Other states have their own rules for undoing a judgment.

Ninety-day notice. In New York, state law generally requires a 90-day notice to the homeowner before a foreclosure case on a home loan begins (RPAPL 1304). Other states set their own notices.

Note. The paper in which a borrower promises to repay the loan. The note is the promise, and the mortgage is the security behind it.

Notice of default. A notice telling a borrower the loan is behind and what would bring it current. In some states it is recorded, with a waiting period after.

Notice of sale. The notice saying a property will be sold, with the date, the time, and the place. A date named in one can later move.

Service of process. The formal delivery of court papers to the person being sued. The date of service usually starts the clock.

Servicer. The company that takes the payments, runs the escrow account, and sends the monthly statements. It is often not the owner of the loan.

Settlement conference. In some states, a meeting the court holds early on where the homeowner and the lender talk about alternatives to a sale. New York generally requires one in owner-occupied home loan cases (CPLR 3408). Many states have nothing like it.

Sheriff's sale. In many states the county sheriff runs the foreclosure auction, and that is what it is called. Elsewhere it is a trustee's, referee's, or commissioner's sale.

Short sale. A sale for less than the amount owed, which the lender must approve in writing. Whether any remaining balance is released depends on that approval.

Summons. The court paper telling a person they are being sued and how long they have to respond. Most other deadlines are measured from its date.

Surplus monies. In New York, the money left over after a foreclosure sale has paid the debt, the interest, and the costs. New York has its own claim process and deadlines. Other states use different names, procedures, and time limits.

Trustee. In states that use deeds of trust, the third party named in the loan papers who can conduct a sale without a court case. A trustee is not a judge.

Upset price. The lowest amount a property may be sold for at a foreclosure auction, in states that use one. It is set by the court or by statute, not by a bidder.