What is the definition of mortgage foreclosure?
A mortgage foreclosure occurs when a lender takes legal possession of a property because a borrower has become delinquent in his mortgage payments. It is the option of last resort for most lenders.SignificanceMortgage foreclosures have always been an option. However, in recent years, the occurrence has increased dramatically because of problems in the housing industry.FunctionA foreclosure serves as a way for a lender to recoup some of the outstanding debt and cut their losses on a bad loan. The lender sells the foreclosed property to make the funds necessary to eliminate the debt.Time FrameIt usually takes several months of nonpayment or severely negligent payments for a lender to resort to such an extreme measure as foreclosure. Many companies are trying to work with borrowers in trouble to find a solution that is less drastic than foreclosure.OwnershipA borrower must vacate the premises when the home goes into foreclosure. They are no longer the legal owners of the property.EffectsA
