What is a foreclosure?

Foreclosure is a legal proceeding in which the financer of a mortgage seeks to regain property because the borrower has defaulted on payments. In other words, a foreclosure is a situation in which a homeowner is unable to make payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract.

In some cases, to avoid the expensive foreclosure process, creditors and lenders may try to make adjustments to the repayment schedule to allow the homeowner to retain ownership. This situation is known as a special forbearance or mortgage modification.

However, most lenders will use intimidation tactics encouraging struggling homeowners to accept terms that aren’t necessarily the best for their situation. Homeowners need to know what they can actually afford and what solutions are reasonable before even trying to negotiate with their lender. That’s why it’s best to have professional help when dealing with your mortgage lender.

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