What is the legal proceeding to terminate a mortgagor's interest when payments are in default?

• A. Foreclosure
• B. Deed
• C. Lien
• D. Quiet title

Answer: (A)

Foreclosure is the legal process that terminates a mortgagor's interest when payments are in default. When a borrower misses payments, the lender can accelerate the loan and initiate foreclosure to recover what’s owed by forcing the sale of the property. Depending on the loan and state law, foreclosure can be judicial (through the court system) or nonjudicial (via a power-of-sale clause). In either path, the property is sold, the proceeds go to satisfy the debt, and the borrower’s ownership rights are ended or greatly reduced. Some markets allow a deficiency judgment if the sale doesn’t cover the full loan amount, though that depends on jurisdiction. The other terms don’t describe a process that ends the mortgagor’s ownership: a deed transfers title, a lien is a security interest, and a quiet title action is to resolve title disputes or claims, not to terminate the borrower’s interest through sale.