A home foreclosure is a process in which a financial lender, usually a mortgage company, takes possession of a property to recover the amount owed on the loan. The foreclosure process can be lengthy and usually begins when a borrower fails to make payments and the lender files a public default notice. The foreclosure process usually ends in one of the following ways:
The borrower reinstates the loan by paying the defaulted loan amount or negotiating with the lender before the actual foreclosure process begins.
The borrower sells the property to a third party during the pre-foreclosure period to pay off the loan and avoid foreclosure.
The lender takes ownership of the property. In this case the lender may retrieve the property from the borrower during the pre-foreclosure period or the lender may buy the property at the public auction (sometimes known as a sheriff's sale). Often, the lender will have a separate company provide maintenance on the property until it can be resold.
A third party purchases the foreclosed property at a public auction.
There are many reasons for the occurrence of a foreclosure. Oftentimes it is the result of a risky mortgage or personal crisis such as job loss or medical issues. Regardless of the reason, if you are facing foreclosure, seek professional assistance immediately because the sooner you address the problem the more options and time you have to correct the situation and avoid losing your home.