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Definition: Foreclosure

Foreclosure is the final step in the mortgage process in case the borrower totally defaults or stops paying the installments altogether. It is a legal process and involves creditor recovering the money by forcing the sale of the collateral asset.

Creditor(or Bank) can chose to reposses the asset also. In case of repossesion the borrower still has right to reposses the asset if he/she pays the balance amount to the creditor.

In case of foreclosure the creditor can take the right to the asset and chose to sell the asset to recover the balance and termintate the process.



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