What is foreclosure?

Foreclosure is the legal process wherein the lender is given the right to deprive a mortgagor's equity or right to redeem his estate. Through this proceeding, the lending institution establishes an exclusive claim/ownership to the foreclosed mortgage.

Causes of Foreclosure


Foreclosure happens when a homeowner fails to pay the mortgage on the agreed due date stated on the contract.  The borrower may have several reasons for failing to carry out his mortgage responsibilities. These reasons include too much debt, loss of job, medical problems, divorce, loss of a loved one, or any other cause where financial stability is challenged.

How to Avoid Foreclosure

Foreclosure can be avoided and settled. Most lenders are willing to meet half way with the borrower in able for both to achieve a win-win result. If you are a mortgagor caught in this unpleasant situation, you can:

Contact and talk to your lender. When problem with money arises, do not wait for a foreclosure notice. Present your case and let them know your willingness to compromise on alternatives that will save your estate. Lenders have "workout options" which prevent you from losing your home.

Approach and consult an HUD-certified housing counseling agency in your local area. HUD's website has a large list of counselors to help homeowners with their mortgage problems.