Key terms

While working with your mortgage company, it’s important to understand the mortgage terms that may be used so you can have a better (and easier) discussion with your mortgage company.

Forbearance

An agreement to temporarily suspend or reduce monthly mortgage payments for a specific period of time. The mortgage company will then postpone legal action when a homeowner is delinquent. A forbearance is usually granted when a homeowner makes satisfactory arrangements to bring the overdue mortgage payments up to date.

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Foreclosure

The legal process by which a property may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the homeowner is in default for a reason other than the failure to make timely mortgage payments.

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Foreclosure Prevention

Steps by which the mortgage company works with the homeowner to find a permanent solution to resolve an existing or impending loan delinquency.