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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Foreclosure


Synonyms:foreclosed mortgage, mortgage foreclosure
Filed Under: financial-banking, legal-contracts, mortgages
Tags: banking, contract, legal, mortgage
 

Definition of foreclosure

foreclosure
1. 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.

Related Terms and Acronyms:

  • bankruptcy (BK)   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.
  • delinquent mortgage   A mortgage loan where the borrower fails to make payments as specified in the loan agreement.
  • loan   Letting another party use something of value temporarily.
  • mortgage (mtg)   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   Insurance that protects a lender if a homeowner fails to pay off his or her mortgage.
      ➥  CanEquity offers mortgage insurance.
  • notice of default (NOD)   The step in the foreclosure process where the lender informs the court that the borrower is in arrears.
  • power of sale   The right of a mortgagee to force the sale of the property without judicial proceedings should default occur.
  • repossession   The taking back of property after a borrower has stopped making payments.
  • restructured loan   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   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.

More Related Terms and Acronyms

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