Foreclosure

A legal means whereby the owner of property loses his legal rights and interests therein. It arises from a default on the part of the mortgagor in paying a mortgage lien or taxes against the property. In a foreclosure, the creditor takes over the property through a judicial order and the property is sold at auction. The proceeds received are used to pay the mortgagee any remaining balance and back taxes. The remainder is distributed to the original owner of the property.