How is "foreclosure" defined in property law?

In property law, "foreclosure" is defined as a legal process by which a lender repossesses property due to the borrower's failure to make required payments. This occurs when a borrower defaults on their mortgage or another loan secured by the property. The lender has the right to initiate foreclosure proceedings to recover their investment, which typically involves selling the property at auction to satisfy the outstanding debt. This process reflects the lender's secured interest in the property and aims to minimize financial losses stemming from the default.

Understanding this definition is crucial, as it clarifies the serious consequences a borrower may face when they fall behind on mortgage payments, including the potential loss of their home. The focus on the legal aspect emphasizes the formalities involved in foreclosure, including the requirements for lenders to follow procedures dictated by law to ensure that the rights of both parties are respected during the process.