Foreclosures
Foreclosure is the legal process by which a lender reclaims a property from a borrower who has defaulted on their mortgage. When a borrower stops making their mortgage payments, the lender can initiate foreclosure proceedings to take ownership of the property and sell it to recover the unpaid loan balance. Continue Reading Below
Encyclopedia Articles
Discover the definition of financial terms related to foreclosures.
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About Foreclosures
- The lender files a lawsuit against the borrower to establish their right to foreclose on the property.
- The court holds a hearing to determine whether the borrower is in default and whether the lender has the right to foreclose.
- If the court rules in the lender's favor, it issues a foreclosure judgment, which allows the lender to proceed with selling the property.
- The property is sold at a public auction, with the proceeds from the sale used to pay off the borrower's mortgage debt. Any remaining balance may be owed to the borrower.