When somebody wants to live in a house but doesn't have enough money to buy a house, they take out a special type of loan called a mortgage. A bank lends them the huge amount of money needed to buy the house, at a fairly low interest rate - but the bank holds onto the deed to the house until the loan has been fully paid back. If the borrower fails to make their payments, the bank sells the house to get the money it is owed.
Foreclosure is that process where the bank is selling a house that somebody failed to pay for.
The bank wants to sell at a price that covers the unpaid loan. But they have no motivation to sell at a higher price - any leftover money belongs to the borrower. (Since the borrower has usually been paying the loan for a while before defaulting, the remaining debt might be a lot less than the value of a house). So foreclosed houses are cheap to buy.
Most homeowners when buying a house, apply for a mortgage loan, because most people don't have half a million bucks (for example) lying around to put into a house. They pay a down payment and their mortgage "loan" allows them to pay monthly, by contract, to own the house. When they stop paying their mortgage, for whatever reason, often the loss of a job and failure to get another one, they have violated their contract. Their lender, a bank or other financial institution, puts the house into foreclosure proceedings. They usually give the homeowner 3-4 months to pay what is owed in full and if it is not paid, then the lender owns the house and the house is scheduled for auction, and the homeowners are evicted. The house is sold at auction and on the date it sells, the new owners own the house and can move in. In a few states, the houses are sold through a realtor, but few. Most states sell them at auction.
When a house is put into foreclosure, the current resident is kicked out, and usually the bank will try to sell the house. Once the house is sold, the mortgage holder (the resident who was kicked out) will be required to pay any debt left over after the sale.
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When somebody wants to live in a house but doesn't have enough money to buy a house, they take out a special type of loan called a mortgage. A bank lends them the huge amount of money needed to buy the house, at a fairly low interest rate - but the bank holds onto the deed to the house until the loan has been fully paid back. If the borrower fails to make their payments, the bank sells the house to get the money it is owed.
Foreclosure is that process where the bank is selling a house that somebody failed to pay for.
The bank wants to sell at a price that covers the unpaid loan. But they have no motivation to sell at a higher price - any leftover money belongs to the borrower. (Since the borrower has usually been paying the loan for a while before defaulting, the remaining debt might be a lot less than the value of a house). So foreclosed houses are cheap to buy.
It means the person that borrowed the money from the lender stopped payments and the lender is using the legal process for taking ownership.
Most homeowners when buying a house, apply for a mortgage loan, because most people don't have half a million bucks (for example) lying around to put into a house. They pay a down payment and their mortgage "loan" allows them to pay monthly, by contract, to own the house. When they stop paying their mortgage, for whatever reason, often the loss of a job and failure to get another one, they have violated their contract. Their lender, a bank or other financial institution, puts the house into foreclosure proceedings. They usually give the homeowner 3-4 months to pay what is owed in full and if it is not paid, then the lender owns the house and the house is scheduled for auction, and the homeowners are evicted. The house is sold at auction and on the date it sells, the new owners own the house and can move in. In a few states, the houses are sold through a realtor, but few. Most states sell them at auction.
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When a house is put into foreclosure, the current resident is kicked out, and usually the bank will try to sell the house. Once the house is sold, the mortgage holder (the resident who was kicked out) will be required to pay any debt left over after the sale.