Foreclosure

Definition

• The legal process that takes place when a borrower defaults on his or her loan and is deprived of the interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the loan debt.

Synonyms
mortgage foreclosure, foreclosed mortgage

Related Terms and Acronyms

• Bad Credit — Definition,
  • Someone who carries a higher credit risk.
• Bad Credit Loan — Definition,
  • A loan taken out by someone with bad credit.
• Bankruptcy (BK) — Acronym, Important,
  • A court action under the Federal Bankruptcy Code by which a debtor's debts may be discharged, usually by transferring assets to a trustee, or rescheduled.
• Debt Consolidation — Definition,
  • The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan. CanEquity has access to Canada's best debt consolidation products, for more info about debt consolidation see our debt consolidation page.
• Delinquent Mortgage — Definition, Important,
  • A mortgage loan where the borrower fails to make payments as specified in the loan agreement.
• Forbearance — Definition,
  • Delaying foreclosure, usually because the borrower has arranged to pay the amount in arrears.
• Fresh Start — Definition,
  • The characterization of a debtor's status after bankruptcy. i.e., free of most debts.
• GE Capital — Company,
  • GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC."
  ➥ Also offers commercial financing.
• Good Credit — Definition,
  • Someone who carries little credit risk.
• Loan — Definition,
  • Letting another party use something of value temporarily.
• Mortgage (mtg) — Abbreviation, Important,
  • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
• Mortgage Insurance — Definition, Very Important,
  • Insurance that protects a lender if a homeowner fails to pay off his or her mortgage.
  • A policy covering a mortgagor from which the benefits are intended (a) to pay off the balance due on a mortgage upon the death of the insured, or (b) to meet the payments on a mortgage as they fall due in the case of his death or disability.
  ➥ CanEquity offers mortgage insurance.
• Notice of Default (NOD) — Acronym, Important,
  • The step in the foreclosure process where the lender informs the court that the borrower is in arrears.
• Power of Sale — Definition,
  • The right of a mortgagee to force the sale of the property without judicial proceedings should default occur.
• Repossession — Definition,
  • The taking back of property after a borrower has stopped making payments.
• Restructured Loan — Definition,
  • A mortgage in which basic terms -- such as interest rate, term and monthly payment -- have been changed to prevent foreclosure. Not a normal practice in Canada.
• Secured Debt — Definition,
  • A debt that is secured by a lien on debtor's property that may be taken by the creditor in case of non-payment by the debtor. A common example is a mortgage loan.
• Unsecured Claim — Definition,
  • A claim or debt where the creditor has no guarantee of repayment because collateral is not required from the borrower. Credit is granted solely on an assessment of the debtor's future ability to repay the claim or debt.
• Workout — Definition,
  • A "mortgage workout" is when a lender works with a borrower on altering their existing mortgage terms in order to prevent a foreclosure.