Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a piece of real property (immovable property) due to the owner's failure to comply on its promissory note. Lenders may choose to impose foreclosure upon you when you stop making your mortgage payments. Once you do, youíll begin receiving letters from your lender stating that you have missed one or more payments. There are, however, ways that you can prevent foreclosure from happening.
Respond to your lenderís letters immediately by calling or writing to the lenderís Loss Mitigation Department. Explain your situation. Be prepared to provide financial information, such as your monthly income and expenses. Without this information, they may not be able to help. Stay in your home for now. You may not qualify for assistance if you abandon your property. There are also counseling companies from the Department of Housing and Urban Development which may offer services free of charge.
In the United States, there are two sorts of foreclosure in most common law states. Under "strict foreclosure," the bank claims the title and possession of the property back in full satisfaction of a debt, usually on contract. In the proceeding simply known as foreclosure, the property is exposed to auction by the county sheriff or some other officer or official of the court.