Foreclosure Auction Key Terms

Understand the key terms relating to the foreclosure auction process
By Howard Robertson Foreclosure is a legal process that involves auction or sale of property (real estate) in the case of default in the mortgage payment. Foreclosures usually arise as a result of bankruptcy or financial distress of the borrower.

Whether you are a mortgage borrower or you want to invest in real estate through the purchase of foreclosed property, you will need to be conversant with the technical terms relating to it. This guide intends to cover some of the important key terms relating to foreclosure auctions, such as bankruptcy, mortgage, redemption and delinquency.

Bankruptcy

Filing for bankruptcy is one of the tools used to avoid foreclosure. Though it may sound extreme to file for bankruptcy, it can help the property owner avoid the loss of the property or at least avoid the foreclosure proceedings for some time.
Try:  To understand different legal clauses regarding bankruptcy, read through the glossary at Foreclosure University, an online resource for real estate investing.

Mortgage

A mortgage is an instrument that secures the repayment of a loan. In other words, mortgaging is the process through which a borrower takes a loan by collateralizing personal property.
Try:  For information regarding mortgages, read through the glossary of technical terms at FrontDoor, a real estate listing site.

Non-judicial foreclosure

The non-judicial foreclosure process involves foreclosing a mortgage without filing a lawsuit or obtaining a court order. This is possible in cases where a deed of trust gives the lender the right to sell the property in case of default.
Try:  You can read through the definition of non-judicial foreclosure at ForeclosureLaw.org.

Redemption period

Redemption period is the additional time given to the property owner to stay in the property. State laws specify the duration of redemption.
Try:  You can find more information about redemption at U.S. Department of Housing and Urban Development.

Distressed property

A distressed property is a property available for sale at lower prices to relieve the owner from the financial crunch and risks of foreclosure. Generally, sale of distressed properties is a pre-foreclosure process.
Try:  To learn more about distressed properties and related terms, refer to E-ForeclosureSearch.com, a property listing Web site.

Delinquency

Delinquency is an overdue loan payment for which the grace period is not over. Though the payment is late, it is still not a default payment.
Try:  To understand more about this term, you can read through the description at ForeclosureFish.com.