What is 'Foreclosure Action'
The legal proceedings initiated by a lender in the case of mortgage default. When a borrower fails to make mortgage payments or otherwise fails to fulfill any of the obligations set forth in the mortgage agreement, the lender can enforce its rights through a foreclosure. Foreclosure is the process of selling the mortgaged property and using the proceeds of the sale to repay debt; Foreclosure action is the actual filing of and carrying through of the foreclosure process.
BREAKING DOWN 'Foreclosure Action'
A lender will typically initiate the foreclosure action when a borrower has defaulted on a loan after a certain amount of time, as specified in the mortgage documents. Very specific and detailed statutory procedural requirements apply to foreclosures and must be complied with to avoid any invalidation of a foreclosure sale. Proper notice of the foreclosure sale must be given to the debtor and to the general public, but exact procedures can vary state by state. All of the necessary steps in the foreclosure process constitute the foreclosure action.