Which term is used to describe a legal procedure used to sell property when a mortgage is defaulted?

The term that correctly describes the legal procedure used to sell property when a mortgage is defaulted is "Foreclosure." This process allows a lender to reclaim the property used as collateral for a mortgage when the borrower fails to meet their loan obligations, typically through missed payments.

During foreclosure, the lender can initiate legal proceedings to take possession of the property. Once the process is complete, the property is usually sold at public auction to recover the remaining balance of the loan. This term specifically encompasses the entire legal framework and process involved in dealing with the defaulted mortgage, making it distinct from other options.

Judicial Sale refers to the sale of property ordered by a court, which may occur in a foreclosure situation but does not encompass all aspects of the foreclosure process. A Conditional Sale involves selling property with a condition that must be fulfilled for the transaction to be completed, often unrelated to loan defaults. Escrow pertains to a financial arrangement where a third party temporarily holds funds or documents until certain conditions are met, which is not directly about the sale of property due to mortgage default. Hence, Foreclosure is the most accurate term in this context.