When homeowners stop making mortgage payments, their lenders don’t take kindly to it. And that’s how foreclosures come to be.
But what, exactly, is a foreclosure?
Foreclosure is the legal process by which a lender attempts to get a buyer to repay an outstanding mortgage balance after that borrower stops paying their monthly payments. A lender that hasn’t gotten paid can force the sale of a delinquent owner’s home to recoup its money.
Foreclosure can be a miserable process for homeowners. But as a buyer, it can present an opportunity to snag a home on the cheap.
How foreclosure works
The exact foreclosure process varies from state to state, but here are the basics.
First, a borrower falls behind on his or her mortgage payments. When that happens, a lender typically gives that borrower a chance to catch up in the form of a grace period. During that time, a