What Is Foreclosure?

Foreclosure is a legal process wherein a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, foreclosures occur because the borrower became delinquent on their mortgage payments.

There are two main types of foreclosure — judicial foreclosure and nonjudicial foreclosure:

• Judicial Foreclosure: Processed through the courts — a judge reviews the evidence after the lender initiates the foreclosure. If the judge finds that the debt is valid, the foreclosure sale is scheduled.
• Nonjudicial Foreclosure: Not processed through the courts — a "power of sale" clause in the mortgage allows the lender to sell the property if the homeowner defaults.

How lenders reclaim properties varies by state law and mortgage terms. While lenders typically seek amicable solutions with borrowers, foreclosures can add legal fees and penalties for homeowners. However, solutions such as loan modifications and financial counseling can provide homeowners with alternatives to navigate the situation. Dive in to discover foreclosure intricacies.

Foreclosures are often rooted in unexpected financial instability. Common triggers include job loss, unexpected medical bills or an adjustable interest rate that increases monthly mortgage payments beyond a homeowner's ability to pay.

Facing foreclosure can be daunting, but timely action can help homeowners chart a course out of foreclosure and eviction. Here are some actionable steps to consider when navigating foreclosure:

Navigating the complexities of foreclosure often raises critical questions. We address some of the most frequently asked inquiries to guide homeowners and potential buyers.

For a deeper dive into the intricacies of foreclosure and associated topics, we've curated a list of valuable resources from MoneyGeek. These handpicked articles offer insights and expert guidance to further your understanding.

Foreclosure Assistance - Explore avenues of support available for homeowners navigating foreclosure. This page provides a comprehensive guide to aid, resources and strategies tailored to those facing mortgage difficulties.

Understanding the Foreclosure Process - Get a step-by-step breakdown of the foreclosure process. From missed payments to auctions, this resource demystifies the entire process, arming you with knowledge.

Glossary of Mortgage Terms - Familiarize yourself with essential mortgage terminologies. Whether you're a first-time buyer or looking to brush up, this glossary makes complex jargon accessible.

Understanding Bankruptcy - Dive into the realm of bankruptcy, an option some consider during financial hardships. Learn about its implications, processes and how it relates to foreclosure.

Foreclosure Statistics - Read about foreclosure data, trends and takeaways.