Default: Occurs 60 to 90 days after a homeowner stops making monthly mortgage payments.

Foreclosure: A legal process in which the mortgaged property is sold to pay off a defaulted loan.

Forbearance: When a lender agrees to freeze a homeowner's debt to give him or her more time to bring payments up to date.

Forbearance Forgiveness: When a lender forgives the amount of debt frozen during the forbearance period.

Loan Servicer: The company that collects monthly mortgage payments, contact delinquent borrowers, and notify insurers and investors of potential problems. The servicer does not necessarily own the loan.

Modification: When a lender agrees to modify the terms of a mortgage--usually to reduce monthly payments. Examples of modification include refinancing, principal forgiveness and short sales.

Office of Mortgage Settlement Oversight: Created to monitor the attorneys general settlement with major banks that came in response to documented cases of widespread mortgage fraud.

Principal: The amount of money borrowed to buy a house (not including interest).

Principal Forgiveness: A loan modification in which the lender forgives part of a homeowner's overall debt.

Refinancing: Paying off one loan by obtaining another, typically with a lower interest rate.

Short Sale: When a house sells for less than the mortgage debt and the lender forgives the difference.