Right Of Foreclosure


DEFINITION of 'Right Of Foreclosure'

A lender's ability to take possession of the property used to secure the loan it provided if the borrower stops making payments. Homeowners associations also have a right of foreclosure, which they can exercise if a homeowner fails to pay homeowners association fees and/or special assessments.

BREAKING DOWN 'Right Of Foreclosure'

For example, if John buys a house by obtaining an adjustable-rate mortgage from the bank and then he stops making his mortgage payments because his adjustable-rate mortgage resets and the monthly payments are too high, the bank will exercise its right of foreclosure. The bank then becomes the new legal owner of the property, and will sell the house to recoup its losses.

  1. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Delinquent Mortgage

    A mortgage for which the borrower has failed to make payments ...
  4. Robo-Signer

    An employee of a mortgage servicing company that signs foreclosure ...
  5. Non-REO Foreclosure

    A real estate property that has been foreclosed successfully. ...
  6. Deed In Lieu Of Foreclosure

    A potential option taken by a mortgagor (a borrower) to avoid ...
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