Foreclosure
Foreclosure is a form of legal proceeding initiated by the bank or other lending agency against the borrower. The lender initiates legal action against the borrower who has not paid back the money borrowed to buy a home or car or any other asset. Under this process the borrowed asset is taken under possession by the bank. In simpler terms your home for which you took a loan and is unable to repay may be confiscated by the bank and you may be evicted by the court.
As a matter of fact, when the terms and conditions of mortgage are violated, it is construed as a default in payment agreed to by execution of a promissory note. The security to the promissory note is provided by the lien created on the property. The process is said to have met its logical end, when it is announced that the “Lender has foreclosed its mortgage or lien”. Behind foreclosure lies very poor credit and financial difficulty. But nowadays with refinancing you can escape foreclosure unless you are in dire situations and your credit worthiness is at an all time low. Check out websites and legal rights on this issue, so that no body can fool you.