Home › Finance › Real Estate & Property › Foreclosure

Foreclosure

for-KLOH-zher /fɔːrˈkloʊʒər/

nounC1GRETOEFL

formallegalbusiness

The process of taking possession of a mortgaged property as a result of the mortgagor's failure to keep up mortgage payments.

Foreclosure is a legal process initiated by a lender to recover the balance of a loan from a borrower who has defaulted, by forcing the sale of the property used as collateral.

The story behind the word. The word 'foreclosure' comes from the Old French 'forclore', meaning 'to exclude, to shut out'. This, in turn, is a combination of 'foris' (outside) and 'claudere' (to close). So, a foreclosure literally means 'to shut out' the homeowner from their property. It's the legal 'closing off' of their rights to the property due to unpaid debts.

Word relationships

Repossession (property): Broader term for taking back property due to default; 'foreclosure' is specific to real estate mortgages.

Word family

foreclose (verb): To take possession of a mortgaged property when the borrower fails to make payments.

Collocations

housing foreclosure
bank foreclosure
avoid foreclosure
face foreclosure
foreclosure crisis

Example sentences

"During the housing crisis, many families faced foreclosure when they could no longer afford their mortgage payments." Economic downturns often lead to increased foreclosures.
"The bank offered a loan modification program to help homeowners avoid foreclosure and keep their homes." Avoiding foreclosure is a priority for struggling homeowners.

Memory hook

When a bank FORECLOSES, they CLOSE the door on your ownership and force you OUT. Close out

When not to use

Do not use 'foreclosure' for any property seizure; it specifically applies to mortgaged property due to loan default.

Fun facts

The legal process of foreclosure varies significantly by state and country, with some requiring judicial oversight and others allowing non-judicial sales.