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Foreclosure

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Definition

Foreclosure is the process a lender or servicer uses to take a mortgaged home and sell it after a serious default. Some states use courts; others use a non-judicial process.

In plain English

If a borrower does not meet the mortgage contract and the default is not cured, the holder of the loan may start foreclosure. The home can be sold and the owner can lose the property. Loss-mitigation options exist to try to avoid that result. Notice rules and timelines vary by state and by federal servicing rules. This page does not state those calendars.

Technical definition

CFPB defines foreclosure as the lender or servicer taking back the property after missed payments and notes judicial and non-judicial paths. Fannie Mae’s consumer glossary includes the same heading.

Why it matters

Deed in lieu, short sale, and foreclosure all can end occupancy. Only foreclosure is the forced process.

Commonly confused with

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Important note

This page does not state when foreclosure may start or what notice a borrower must receive.

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