What is a "foreclosure"?

A foreclosure is a legal process that occurs when a lender takes possession of a property due to the borrower's failure to make required mortgage payments. This process typically follows a series of missed payments, where the lender will notify the borrower of their default and initiate legal action to reclaim the property. In essence, foreclosure allows the lender to recover their investment by selling the property, often through a public auction. This legal procedure is an important aspect of real estate and lending, as it outlines the rights of the lender to safeguard their financial interests when a borrower is unable to comply with the terms of their mortgage agreement.

In contrast, refinancing involves modifying an existing loan, selling homes quickly is a marketing strategy, and negotiating lower interest rates pertains to discussions about financing terms, none of which accurately define the process of foreclosure.