Bankruptcy: A legal declaration of an debtor’s inability to pay their financial debts when due. Bankruptcy usually leads to financial restructuring that may in some cases lower the amount required to discharge the debts. Bankruptcy should be the last resort for anyone before declaring bankruptcy you should seek to modify their loans/debt with their creditors.

Deed In Lieu of Foreclosure: A deed to real property from a defaulting borrower that accepted by the lender which avoids the necessity of the lender going through the formal foreclosure process. As with foreclosure a deed in lieu of foreclosure does affect the borrower’s credit ratings. The deed in lieu of foreclosure is not as damaging as a formal foreclosure.

Deficiency Judgement: A judgement awarded by a court when the proceeds from a sale of are insufficient to pay off the debt of the defaulting borrower. A personal judgement against a debtor for the amount remaining due after a the sale.

Foreclosure: Foreclosure is the legal process where a lender/investor/beneficiary terminates the owner’s rights to a property that was pledged as security for a debt. Foreclosure is usually triggered by the borrower failing to make the scheduled payments as agreed upon.

Judicial Foreclosure: The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

The borrower has one year (12 months) after the foreclosure sale to redeem the property if the judicial foreclosure process is used.

Non Judicial Foreclosure: The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

Notice of Default (NOD): A recorded document which officially starts the foreclosure process. The document can be filed anytime after the 16th day a borrower is late making a scheduled payment.

Notice of Trustee Sale (NOTS): This is the second recorded document in the foreclosure process. This document states the opening bid at the foreclosure sale, the day and time of the exact location the sale will take place. The NOS can be filed any time after the 90th day the NOD was filed and recorded. The actual Trustee Sale cannot take place any sooner than the 21st day from the date the NOTS was filed.

Real Estate Owned (REO): Real estate owned is frequently referred to as REO. The REO property is a property that was acquired through foreclosure proceedings and is currently being held as inventory.

Redemption: Redemption refers to the borrower’s right to buy back the property or, to bring the mortgage up to date while the property is being foreclosed upon, or after it has been foreclosed on by the lender/creditor/beneficiary. The redemption period in the Nevada foreclosure process is from day 36 through day 70 after the NOD was filed/recorded.

Short Sale: A type of pre foreclosure sale where the mortgagee agrees to let the borrower sell the property for less than the full amount due, and accepts the proceeds in order to release the lien on the property during the sale.

Trustee Sale: The forced sale of real property under a deed of trust, by the lender/beneficiary to satisfy the debt. Usually caused by the borrowers inability to make the scheduled payments agreed upon in the mortgage note/terms.