A foreclosure is a legal procedure whereby property used as security
for a debt is sold to satisfy the debt in the event of default in
payment of the mortgage note or default of other terms in the mortgage
document.
The foreclosure procedure brings the rights of all parties to a
conclusion and passes the title in the mortgaged property to either the
holder of the mortgage or a third party who may purchase the realty at
the foreclosure sale, free of all encumbrances affecting the property
subsequent to the mortgage.
Foreclosure is a legal term referring to the failure of a mortgagee
to pay the amounts specified in the terms of the mortgage contract. In
foreclosure, legal proceedings often determine that the lender on the
property gains control of it.
