What is Foreclosure?
Foreclosure takes place when a mortgage holder has failed to make a repayment on their home loan, and the financial lender takes legal action to take possession or transfer ownership of the property to themselves.
Once a property has been repossessed and ownership has been transferred, the lender can then sell the property in a ‘forced sale’ to recover any costs.
This legal process is tediously lengthy, so you’re not likely to be foreclosed over one missed payment. Under the National Credit Code, lenders must provide a reasonable opportunity for the borrower to repay the loan.
The term foreclosure is often used interchangeably with mortgagee possession, and while similar, they have different legal implications.
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