Introduction to Foreclosure

Foreclosure, legal process in which a person who has made a mortgage (the mortgagor) in order to borrow money loses his or her rights to the mortgaged property. A mortgage represents security-generally real estate-for money loaned. The mortgagor retains possession of the property, and foreclosure is effected only if the mortgagor fails to make payment of the debt at the proper time or fails to meet other obligations specified in the bond or mortgage. To effect a foreclosure, it is usual to apply to a court for authority to sell the property or to proceed with the sale under a power provided in the mortgage itself. In such instances the term foreclosure is loosely applied to the sale by the mortgagee (holder of the mortgage) or by a trustee on his or her behalf. Money received from a sale is applied to all debts on the property, including payments due to the mortgagee.” (1)


Notes and References

Guide to Foreclosure








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