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
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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.