Definition
Foreclosure is a legal process where a lender takes possession of a property when the homeowner fails to make their mortgage payments. It is the bank's way of recovering the money they are owed.
Understanding Foreclosure Timing
If mortgage payments are missed over time, foreclosure may occur after a borrower defaults on their loan. In simple terms, the lender takes back the property to recover the money owed. Example: If a homeowner owes $200,000 on their mortgage and stops paying, the lender might foreclose to sell the home and recoup the balance. It's not an immediate process; lenders often try to work with homeowners first. A common misconception is that foreclosure means instant eviction. In reality, the process can take several months, giving homeowners time to explore other options or relocate.
