Foreclosure hurts! It is a sad time in your life when your home is foreclosed. It happens to homeowners when something prevents them from paying their mortgage. Sometimes it is a family disaster that strikes, it could be the loss of a job, or an adjustable-rate mortgage that has seen a payment increase that cannot be meet. Whatever the reason, the homeowner is in trouble.

Foreclosure is the legal and professional proceeding in which a mortgage, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property.

If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the owner the right of redemption if the borrower repays the debt. When this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lienholders can and do use foreclosure, such as for overdue taxes, unpaid contractors' bills or overdue HOA dues or assessments.

When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien".

If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.