Foreclosure is a legal process in which a lender claims ownership of a property when the borrower defaults on mortgage payments. After multiple missed payments, the lender may initiate foreclosure to recover the loan balance by selling the property. Foreclosure has serious financial consequences for the borrower and impacts credit scores and limits future loan opportunities. Since, in most cases, it’s a last resort, borrowers facing difficulty are encouraged to explore options, like refinancing or payment arrangements, to avoid foreclosure whenever possible.