What term describes the state of having failed to make payments on time, potentially leading to foreclosure?

The term that accurately describes the situation of having failed to make payments on time, which can ultimately lead to foreclosure, is "delinquency." When a borrower misses one or more scheduled payments, their account enters a state of delinquency. This condition is often the first step in the process that could lead to default and potentially foreclosure if the situation is not resolved.

Understanding delinquency is crucial because it can trigger various consequences for the borrower, including late fees, increased interest rates, and reports to credit bureaus, which negatively impact credit scores. It's essential for borrowers to be aware of the seriousness of falling behind on payments and to communicate with their lenders to explore options for remediation before the situation worsens.