Glossary of Foreclosure and Real Estate Terminology

Understanding the terminology used by mortgage lenders, investors, and foreclosure and real estate professionals is essential for navigating the complex world of foreclosures.

This glossary provides clear definitions of key terms you’ll encounter, helping you make informed decisions whether you’re a buyer, seller, or industry professional.

Key Terms and Definitions

Assignment of Deed of Trust or Mortgage: Assumption by a purchaser of liability for payment of an existing mortgage, or deed of trust. May or may not be accompanied by a release of liability of the original borrower.

Awaiting Update: A term RealtyTrac uses to let consumers know a property is in a transition period between foreclosure filings (NOD/LIS to NTS/NFS and NTS/NFS to REO). Once RealtyTrac receives an update with the latest foreclosure status, the information is updated on the website.

Bankruptcy: A legal proceeding which allows a debtor to discharge certain debts or obligations or allows the debtor time to reorganize his/her financial affairs so he/she can fully pay the debt. Bankruptcy does not discharge obligations secured by an assessment lien.

Declaration of Default: A document instructing the trustee (usually appointed by a bank) to prepare and record a Notice of Default (NOD), and if necessary, to sell the property at auction in order to satisfy the unpaid obligation or lien.

Deed of Trust: A legal document in which the borrower conveys the title to a 3rd party (trustee) to hold as security for the lender. When the loan is paid in full the trustee reconveys the deed to the borrower. If the borrower defaults on the loan the trustee will sell the property and pay the lender the mortgage debt.

Foreclosure: A legal action that terminates all ownership rights in a home when the homebuyer fails to make the mortgage payments or is otherwise in default under the terms of the mortgage.

Full Reconveyance: A document prepared by a trustee, when an obligation secured by a deed of trust, or mortgage, is paid back in full. Once recorded, this reconveyance eliminates the lien from the property’s title.

Government-Owned (GOV): A foreclosed property offered for sale by the government. When a property purchased with a federally insured mortgage (i.e., FHA, VA) is foreclosed by the lender, the federal government pays the lender what is owed, takes possession of the property, and offers the property for sale.

History of Notices: Listing of other foreclosure notices posted on RealtyTrac for the same property.

Junior Lien: A legal claim upon real property recorded subsequent to (after) another claim or legal obligation (for example, a senior lien would have priority in most cases).

Junior Lienholders: These are also know as secondary or other lienholders. It refers to people who have a recorded lien against the property.

Lien: A claim or charge on property for payment of some debt. With respect to a mortgage, it is the right of the lender to take the title to your property if you do not make the payments due on the mortgage.

Lis Penden (LIS): Notification of pending lawsuit. The initial document (judicial) filed by an attorney or trustee that starts the foreclosure process after the occurrence of default under the deed of trust or mortgage. Both LIS and NOD are part of the PRE-foreclosure process.

Lis Pendens: The lis pendens is a notice that a lawsuit is pending, the outcome of which affects title. A lis pendens is usually filed by the lender to start the foreclosure process under judicial foreclosure (just as a notice of default begins the foreclosure process under non-judicial foreclosure)

Military Affidavit: A written and sworn statement that, to the best of the homeowners association’s knowledge, the property owner is not in active military service and entitled to any rights under the Soldier’s and Sailor’s Relief Act of 1940.

Mortgage: A conveyance of an interest in real property, given as security for the payment of a debt. An agreement between two parties

Notice (Judgment) of Foreclosure Sale (NFS): An order signed by a judge, directing a “ Notice of Sale” be published and that a referee (trustee) sell the property at public auction.

Notice of Default: A notice of homeowner’s failure to perform his/her obligations as to the payment of assessments under the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). When recorded, it is the initial step in a Trustee’s Sale Proceeding.

Notice of Default (NOD): The initial document (non-judicial) filed by a trustee that starts the foreclosure process, usually after the occurrence of a default under the deed of trust, or mortgage. Both LIS and NOD are part of the PRE-foreclosure process.

Notice of Trustee’s Sale: A document which is mailed, advertised, posted and recorded. Among other information, it provides the date, time and location of the Trustee’s Sale and also contains a description of the property to be sold.

Notice of Trustee’s Sale (NTS): A filing by notice announcing a public auction.

Novation: The substitution of a new contract between the same, or different parties; a substitution, by mutual agreement, of one debtor for another, or one creditor for another. The result is that the old contract is extinguished, and a new contract is created, usually with the same content, but with at least one different party.

Postponement: A verbal announcement made at the time and place of the scheduled Trustee’s Sale. The announcement establishes the new date and time for the Trustee’s Sale.

Pre-Publication Period: This is a statutory minimum time period of three months following the recording of the Notice of Default which the trustee must wait before setting a date for the Trustee’s Sale.

Publication Letter: The authorization from the homeowners association for the Trustee to set the sale date and begin notification and publication of the Notice of Trustee’s Sale.

Publication Period: The time period beginning after the Pre-Publication Period and ending with the Trustee’s Sale. During the Publication Period, the Notice of Sale is mailed, advertised, posted and recorded. This time period is approximately 30 days long.

Real Estate Owned (REO): “Real Estate Owned” by the lender; the final step in foreclosure process. This document conveys property ownership back to lender.

Recession of Notice of Default: After an amount in default has been cured, or paid-back, this document, when signed by the lender and recorded by the trustee, removes the burden of the previously recorded Notice of Default.

Reinstatement Period: The time period beginning when the Notice of Default is recorded, and ending five business days before the trustee’s auction sale. The default may be cured, or paid-back, at any time during this period by paying all delinquent amounts, including the trustee’s fees and costs.

Rescission of a Notice of Default: When signed by the homeowners association or agent and recorded by the trustee, this document removes the effect of the previously recorded Notice of Default.

Substitution of Trustee: A written document by which one trustee is appointed in place of another.

Trustee: The person or party to whom property is conveyed in trust for the benefit of others.

Trustee’s Deed Upon Sale: A document signed by the Trustee that transfers ownership of the foreclosed property to the successful bidder at a Trustee’s Sale.

Trustee’s Sale: A public auction sale of the property described in a Notice of Default that is the subject of the Trustee’s Sale Proceeding.

Trustee’s Sale Guarante : A written guarantee from a title company assuring the accuracy and completeness of information provided by that company and necessary to process a non-judicial foreclosure.

The information above was gathered from sources deemed reliable and is intended for informational purposes only. Please consult official assessment records. State and county terms and policies may vary so consult your local bylaws.