Foreclosed

Foreclosed is the past participle of foreclosure and is commonly used as an adjective to describe property or a borrower who has lost rights to their property under a mortgage following default. A property described as foreclosed has typically been repossessed or transferred by the lender after the borrower failed to keep up with mortgage payments.

Foreclosure is a legal process that allows a lender to recover the balance of a loan by forcing the sale of the secured asset. The process and timeline vary by jurisdiction but generally involve an initial default, a notice or pre-acceleration period, and a sale or auction of the property. Most jurisdictions provide two main forms: judicial foreclosure, which requires court involvement, and nonjudicial foreclosure, often called a power of sale, which proceeds under a mortgage or deed of trust without court action. If the property is not redeemed, the title may be transferred to the lender or to a subsequent bidder; such properties often become real estate owned (REO).

Impact: Foreclosure can severely affect a borrower's credit and may lead to deficiency judgments where allowed. It also affects neighborhoods and property markets and can impose costs on lenders. Recent protections in some places include limits on fees, required notices, and options for loan modification, repayment plans, or temporary forbearance.

Alternatives to foreclosure include loan modification, short sale, or deed in lieu of foreclosure.