The Foreclosure Process
A foreclosure is a legal process whereby a lending institution aims to recover all or parts of a loan balance from a borrower (typically the homeowner) who has stopped making mortgage payments. This is typically the result of the borrower failing to make payments to lending institution, as defined in their mortgage or deed of trust.
Typically the process for a foreclosure would be initiated by consecutive missed or late payments by the borrower, followed up a public Notice of Default by the lender, to a Pre-foreclosure period where the borrow can attempt to remedy the issue. If the situation cannot be resolved, the lending institution will then proceed to a foreclosure auction, sell in an attempt to recoup the value of the loan. Should the foreclosure auction fail, the lending institution will normally take position of the property, which would then deem the piece of real estate as a bank-owned property or real estate owned property (REO).
