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Foreclosure is a situation in which a homeowner is unable to make full principal and interest repayments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as specified in the mortgage deal. One month after the homeowner misses a home loan payment, he/she is in default and will be notified by the lender. Three to six weeks after the homeowner yearns for a mortgage payment, presuming the mortgage is still delinquent, and the house owner has not comprised the missed payments in just a particular grace period, the lender will commence to foreclose. The farther behind the borrower falls, the more difficult it becomes to get up since lenders add fees for payments that are 10 to 15 days overdue.

Each state has its own foreclosure laws in the notices the lender must post publicly and/or with the homeowner, the homeowner's choices for bringing the loan current and avoiding foreclosures, and the method for promoting the property. In twenty-two states – including Florida, Illinois, and New York : judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent.

If the foreclosure qualifies, the local sheriff auctions the home to the highest bidder to try to recoup what the bank is payable, or the bank becomes the owner and offers the home through the traditional route to recoup its loss. The entire legislativo foreclosure process, from the borrower's first, missed transaction through the lender's sale for the home, usually will take 480 to 700 days and nights, in accordance with the Mortgage Bankers Association of America.

The other 28 states – including Arizona, California, Georgia and Texas – mostly use non-judicial foreclosure, also called the power of sale, which is often faster and does not go through the courts unless the house owner sues the lender.

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