Definition
The legal process by which a lender seizes and sells a property when the borrower fails to make mortgage payments. Foreclosure timelines vary by state (judicial vs. non-judicial) from 6 months to over 2 years. A foreclosure severely impacts credit scores (drops of 100-150+ points) and remains on credit reports for 7 years.
Related Mortgage Terms
- Deed of Trust
A legal document used in many states instead of a mortgage that involves three p...
- Short Sale
A sale of a property for less than the outstanding mortgage balance, with the le...
- Default
The failure to meet the legal obligations of a mortgage, most commonly by missin...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.