Go Back

Updated on
March 16, 2024


Written by: 

The legal process by which a lender takes possession of a property from a borrower who has defaulted on their mortgage. Foreclosure typically happens when a borrower is unable to make their mortgage payments, and the lender initiates proceedings to repossess the property and recoup the outstanding debt. The process can vary depending on the laws of the state where the property is located, but it often involves a notice of default, a public auction, and the transfer of ownership to the lender or a third party. Foreclosures can have a significant negative impact on the borrower's credit score and financial situation, and can also result in a loss of equity for the borrower. Foreclosure properties are often sold at a discounted price, and they can be considered as a distressed property.

Ready to start investing?

Sign up for Landa and start investing in real estate.

Get Started