Acceleration is the action taken by a lender demanding early repayment of the entire loan balance when a borrower defaults on the terms of the loan agreement.
A cross-default clause in a loan agreement that stipulates that a default on one loan can trigger defaults on other loans held by the same borrower.
An agreement specifying the rights of debenture holders, often including the power to appoint a receiver in cases of company default.
A deed in lieu of foreclosure is a legal process where a borrower voluntarily transfers the ownership of property to a lender to satisfy a loan that is in default and avoid foreclosure proceedings.
Default in the context of accounting refers to the failure to fulfill a contractual or other legal obligation, including settling debts, defending legal proceedings, or submitting and paying Value Added Tax (VAT) on time.
Delinquency refers to the state of being past due on a financial obligation but not yet in default. It is an important term in finance and can indicate the payment behavior of individuals or businesses.
The Equity of Redemption is a legal right of mortgagors to reclaim their property after defaulting, by settling the entire mortgage debt including costs and interest before foreclosure occurs.
The Financial Services Compensation Scheme (FSCS) is a protection mechanism, developed under the Financial Services and Markets Act 2000, aimed at safeguarding private investors from financial losses due to the default or bankruptcy of authorized investment firms.
Forfeiture refers to the permanent loss of property for failure to comply with the law, resulting in the divestiture of the title of property, without compensation, for a default or an offense.
A grace and notice provision gives borrowers extra time to make required payments or comply with loan terms before being classified as in default in a loan agreement.
A guaranty is a legal promise to fulfill another party's debt or contractual obligations if that party fails to do so.
A nonperforming asset (NPA) is a classification used by financial institutions for loans or advances that are in default or are in arrears on scheduled payments of principal or interest. These assets are not effectual in producing income and thus pose a risk to the financial health of lending institutions.
A Notice of Default is a formal letter sent to a party in default to remind them of their breach of contract, potentially including a grace period to rectify the default and outlining any penalties for failing to cure the default.
The term 'past due' refers to an obligation or invoice that has not been paid or performed by its specified due date but has not yet reached a state of default.
A Power of Sale is a clause included in mortgages or deeds of trust that grants the lender (or trustee) the authority to sell the property in the event of certain defaults, typically without court intervention.
Receivership is a process where an appointed receiver manages a company's assets to repay debt owed to a lender due to the company's default or insolvency.
A recourse loan is a type of loan in which the lender has the right to pursue the borrower's other assets beyond the collateral if the borrower fails to meet the repayment terms.
Redeeming refers to various financial and legal acts of reclaiming or repurchasing something, such as cashing in a maturing note, bond, or curing a mortgage default.
A Title-Theory State is one in which the law splits the title to mortgaged property into legal title held by the lender and equitable title held by the borrower. The borrower gains full title to the property upon retiring the mortgage debt. In a title-theory state, mortgage lenders may possess the property upon default of the borrower.
A Trustee's Sale is a foreclosure sale conducted by a trustee under the stipulations of a deed of trust, where the trustee is authorized to foreclose the mortgage and sell the property upon the borrower's default.
