1. The borrower's right to pay off the debt and stop a foreclosure BEFORE the foreclosure sale is the:
Answer & explanation
Answer: A. Equitable redemption occurs before the sale; statutory redemption, where allowed, occurs after the sale.
finance
foreclosure
Foreclosure is the legal process a lender uses to sell or take back a property after the borrower defaults on a secured loan, so the lender can recover the debt. It may be judicial, through a court, or nonjudicial, through a power of sale clause, depending on the security instrument and state law. Sale proceeds pay the loan and junior liens in priority order, with any surplus going to the borrower.
- Exam tip
- Judicial foreclosure goes through court; nonjudicial uses a power of sale, common with deeds of trust. Junior liens are usually wiped out by a senior lien's foreclosure.
- Example
- After a homeowner misses six payments, the lender accelerates the loan and forecloses, selling the house at auction.
Related terms & state variants
Sources
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Last verified: 2026-10-23