It is a legal process for a mortgagee (lender) to sell, or take ownership of, a property when the owner defaults on the mortgage. In other words, the homeowner entered into a contractual agreement in order to buy the property but has not been able to meet the promises made under the mortgage.
Acts of default under a mortgage may include:
◾ Failing to make mortgage payments,
◾ Allowing significant damage to the property,
◾ Failing to insure the property,
◾ Failing to pay taxes or condominium fees on the property.
Usually lenders do not foreclose right away because it is an expensive process. It is often in everyone`s best interest if a compromise can be reached between an owner and the lender. Ultimately the lender is worried about losing money, so they will want to sell the property to collect what is owed under the mortgage, or become the owner of the property. To get an order to sell the property, the lender must follow the legal process for foreclosure or get the owner`s consent to the sale.