We know that mortgage and legal terms can be very confusing. To help you understand the language used by lenders, realtors and attorneys, we offer this list of commonly used terms related to foreclosure. If anything is left unanswered, please email your question, and we’ll respond as soon as possible.

Accelerate or Acceleration Clause

An option in the mortgage or deed of trust given to the lender requiring the borrower to pay the entire loan balance at once if the loan is in default.


A sworn written statement given under oath or in the presence of a notary.


An estimate of property value given by a licensed or authorized person.


The past due balance on a real estate loan which includes the loan balance, unpaid interest, late charges and legal fees.


The transfer of property to be held in trust or used by creditors or lenders.


In a foreclosure, the final phase in which a property is sold to the highest bidder.


A legal process allowing a debtor to discharge select debts without paying the total amount due.


The amount offered at auction for a property at sale.

Certificate of sale

A document awarded the winning bidder in a foreclosure sale stating rights to the property once the borrower’s redemption period expires.

Clear title

A title that is free of defects.

Credit bid

A bid that is less than or equal to the balance of the loan in default made on behalf of the lender at a foreclosure sale.


A judicial decision.


A signed document transferring ownership of a property from one party to another.

Deed of trust

A 3-party security document for the borrower, lender and trustee, conveying the legal title to the property as security for the repayment of a loan.

Deed-in-lieu of foreclosure

Borrowers voluntarily transfer their rights in a property back to the lender.


A mortgage or deed of trust is in default when the borrower fails to make payments as agreed to in the original promissory note.

Deficiency judgment

A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.

Equitable title

The right of possession with the right to acquire legal title once a condition has been met.

Fair market value

The price for property selling on the open market.


The forced sale of a property pledged as security for a debt in default.


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