Foreclosure refers to the actions and proceedings that occur when a bank takes over possession of a property due to the borrower being unable to repay the mortgage against it.
Foreclosure is a tedious process that even lenders would want to avoid as much as possible until there is no option.
This is because it can be costly and time consuming.
Moreover, no lender would want to be seen as the people who chases homeowners out of their own homes.
When a borrower is delinquent on a payment, the bank might turn a blind eye and try to coax the borrower into meeting his debt obligations.
But when defaults occur, usually after delinquency for more than 90 days, banks will take a more serious approach to resolving the problem.
If there can be no agreement between borrower and lender towards any type of solution, the bank might commence foreclosure.
Even then, lenders are known to continue trying to seek a middle ground with borrowers so as to abandon the foreclosure process.
The any loss mitigation attempt is unable to reach an agreeable outcome accepted by the parties involved, the the foreclosure process would proceed to eventually liquidate the property in a mortgagee auction to settle the outstanding debt.
