What is a Foreclosure?

A foreclosure is a situation in which a lender seizes a property because the homeowner has been unable to make mortgage payments in a timely manner. The lender evicts the homeowner and sells the property in order to earn back the unpaid balance of the mortgage. The exact terms of this arrangement are noted in the mortgage agreement signed by the homeowner.

Foreclosure Process

The foreclosure process typically follows a standard flow, where the lender first issues a notice of nonpayment, then allows a grace period during which missing payments can be made, and then evicts the homeowner after a certain period of time has passed without payment.

State governments have issued laws regulating how the foreclosure process shall work within their boundaries. These laws mandate differing requirements for how or whether the lender must issue eviction notices, and give homeowners a range of options for how to avoid foreclosure. These laws also impose differing timelines for each step in the process, as well as the method by which a property can be sold by the lender.