What term describes the process when a lender contacts a borrower who is behind on payments?

The term that best describes the process when a lender contacts a borrower who is behind on payments is "Collection." In this context, collection refers to the steps taken by lenders to recover outstanding debts from borrowers who failed to make their payments. This can involve communication with the borrower to remind them of their obligations, assess their financial situation, and potentially work out a plan to facilitate repayment.

Understanding this term is important for those in the real estate and finance fields since it highlights the lender's role in managing delinquent accounts. The collection process can also involve various strategies, such as offering payment plans or exploring options for loan modification, to help borrowers get back on track with their payments.

In contrast, "Default" refers to the situation where the borrower fails to meet their loan obligations, which is the condition that triggers the collection efforts. "Negotiation" would imply a discussion aimed at reaching an agreement about the debt, but it does not specifically refer to the lender's initial outreach to the borrower. "Forbearance" is a temporary postponement of payments, generally agreed upon to prevent default but does not encompass the broader context of the collection process itself.