Foreclosure attorneys glossary

Short, plain-English definitions of the terms you'll meet when choosing a Foreclosure Attorney provider in Trenton Metro.

What is a deed in lieu of foreclosure?: A deed in lieu of foreclosure is an agreement in which a borrower voluntarily transfers the property title to the lender to avoid a foreclosure lawsuit and judicial sale.
What is a deficiency judgment?: A deficiency judgment is a court order that allows a lender to collect the difference between what a property sells for at foreclosure and the total amount still owed on the mortgage.
What is a forbearance agreement?: A forbearance agreement is a written arrangement in which a lender temporarily reduces or pauses mortgage payments for a borrower experiencing financial hardship, with the understanding that the payments will resume or be caught up at a later date.
What is a foreclosure mediation program?: A court-supervised process in which a neutral mediator facilitates discussion between a borrower and lender to explore alternatives to foreclosure before a judgment is rendered.
What is a homestead exemption?: A homestead exemption is a legal protection that shields a specified amount of home equity from creditor claims during bankruptcy proceedings, with the protected amount set by individual state law.
What is a lis pendens?: A lis pendens is a notice of pending litigation recorded against a property to alert future buyers and lenders that the property's ownership or rights are subject to an active court case.
What is a loss mitigation affidavit?: A sworn statement filed by a mortgage servicer in court confirming that it completed a required review of the borrower's loss mitigation options before a foreclosure judgment can be entered.
What is a mortgage assignment?: A mortgage assignment is the legal transfer of a mortgage loan and the creditor's rights from one lender or servicer to another party, documented and recorded in county records.
What is a notice of default?: A notice of default is the formal written notification a lender records and delivers to a borrower after payment defaults, which starts the foreclosure clock and must state the amount owed, the cure deadline, and the lender's intent to foreclose.
What is a promissory note?: A promissory note is a signed document in which a borrower promises to repay a specific loan amount to a lender under agreed terms, separate from the security instrument that pledges collateral.
What is a proof of claim?: A proof of claim is the legal document a creditor (such as a mortgage lender) files in a bankruptcy case to assert the amount the debtor owes and to stake a claim on any bankruptcy estate distributions.
What is a reaffirmation agreement?: A reaffirmation agreement is a court-approved contract in which a borrower promises to remain personally liable on a secured debt, typically a mortgage, after a bankruptcy discharge, allowing them to keep the property securing the loan.
What is a redemption period?: A redemption period is the legal window of time after a foreclosure sale during which a borrower may reclaim their property by paying the full debt, interest, and costs; availability and length vary by state.
What is a sheriff's sale?: A sheriff's sale is a court-ordered public auction where a county sheriff sells a foreclosed or tax-delinquent property to satisfy the debt owed by the property owner.
What is a short sale?: A short sale is the sale of a property for less than the amount owed on the mortgage, approved by the lender to avoid foreclosure.
What is a statute of limitations on foreclosure?: The statute of limitations on foreclosure is the legal time period within which a lender must initiate a foreclosure action after a borrower defaults on a mortgage; failure to file within this window bars the lender's right to foreclose.
What is a trustee's sale?: A trustee's sale is a non-judicial foreclosure auction conducted by a third-party trustee appointed under a deed of trust to sell mortgaged property when the borrower defaults.
What is an acceleration clause?: An acceleration clause is a mortgage provision that permits a lender to demand immediate payment of the entire outstanding loan balance if the borrower defaults on their obligations.
What is an adversary proceeding?: An adversary proceeding is a separate civil lawsuit filed within a bankruptcy case to resolve specific disputes, such as challenging liens, determining debt validity, or recovering property, that do not get resolved through the main bankruptcy filing.
What is an automatic stay?: An automatic stay is a court-ordered injunction that immediately stops foreclosure proceedings, collection actions, and most creditor activities the moment a bankruptcy petition is filed.
What is judicial foreclosure?: Judicial foreclosure is a mortgage default process conducted through court proceedings, where a lender must obtain a judgment before the property is sold to recover the debt.
What is non-judicial foreclosure?: Non-judicial foreclosure is a process where a lender forecloses on a property by exercising a power-of-sale clause in the mortgage without filing a lawsuit or obtaining a court order.
What is robo-signing?: Robo-signing is the mass signing of foreclosure documents by bank employees without reviewing their accuracy or authenticity, typically to speed up the foreclosure process.
What is standing in foreclosure law?: Standing is the legal requirement that a foreclosure plaintiff prove it holds the promissory note and mortgage, giving it the right to bring suit. Inability to demonstrate standing is a frequent defense used to challenge foreclosure actions.