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Glossary term

Foreclosure

Definition

Foreclosure is the legal process a lender can use to take and sell property when a borrower doesn't repay a loan secured by it.

Technical definition

Foreclosure is the legal process through which a lender enforces its security interest in real property following default, typically resulting in sale of the property.

Why it matters

It's the serious downstream consequence of prolonged default on secured debt. Early communication with a lender is generally better than letting it reach this stage.

Example

Extended non-payment on a mortgage-secured farm loan could lead a lender to begin foreclosure.

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