Foreclosure

Foreclosure is the process by which a lender forces the sale of a mortgaged property to recover an unpaid loan. It usually proceeds through a court-supervised auction.

It typically begins after several months of missed payments. The bank chases payment, and failing resolution, applies to the court for auction. While the process runs, there is still a window in which paying can stop it.

Auctioned property generally sells below market value, since the aim is quick disposal rather than the best price. That is how borrowers can lose the home and still owe money.

The credit record lasts. Arrears and foreclosure stay in credit assessments for years, making later loans and cards hard to obtain. Losing the property is not where it ends.

If arrears look likely, contacting the lender early matters enormously. There is a period when forbearance or restructured terms can be negotiated, and once it passes the options narrow sharply. For buyers, auctioned property is a chance to purchase cheaply, but existing tenants' rights and unpaid service charges can come attached, so the legal position must be checked first.