Foreclosure is a Terminology, which means that the borrower of the loan has failed to clear the debt.  Hence the property, which he has mortgaged on behalf of security for the loan, should be sold out. Lender has got the right to sell the property. The lender has the right to terminate equitable right of redemption.

Foreclosure basically is the process by which the lender ensures his/ her money back if the borrower is not able to clear the debt. Bank or the credit holder selling out the property does the Foreclosure of residential mortgage loans. Commonly the failure of promissory note for loans leads to foreclosure.

Generally foreclosure is done at the time written in mortgage documents. However foreclosure is done after a reminder period after the actual period has expired.

Two such type of Foreclosure namely: judicial foreclosure and power of sale are very common.

• Judicial sale:Foreclosure by court or commonly known as judicial foreclosure, is carried out under the supervision of court. After the loan period has finished as written in mortgage documents, the court first satisfies the mortgage and then all lien holders and at last the mortgager or borrower. Sometimes the foreclosure is filed by federal court.

• Power of sale:Power of sale does not require court or any judiciary. In this case the lender has the right to sell the property without any judicial decision. Informing process in which the entire lien holder and the borrower are informed is the same as in case of judicial sale.

There is another kind of foreclosure, which is strict sale. But this is not so common.
The concept of acceleration is followed to determine the price during foreclosure.
In order to stop foreclosure the debtor has to file a petition in the court.

The process can be lengthy or small as well. The debtor has the option of avoiding foreclosure by alternate finance or temporary agreement with the lender.
However if foreclosure is fixed then the Lender first inform the lien holder and the borrower about foreclosure. If the borrower wants to stop it, he can go for various options. Otherwise the foreclosure is the final solution.

When the property is foreclosed then the auction takes place. The due amount can be set as the first bid. After that a biding session goes an. And who has the highest bid takes away with property. However if the property fails to attract any bid it remains the mortgage property.