Foreclosure is the process in which a lender takes action to foreclose, to shut out, to bring to an end, a borrower’s rights in real estate.
In a foreclosure, the real estate is security for a loan, the borrower defaulted, and now the lender wants to take the property, sell it, and apply the proceeds as a credit against the loan.
Strictly speaking, all foreclosures come after there has been a voluntary agreement to borrow money and provide the lender with collateral consisting of a specific piece of real estate.
Other processes result in creditors taking real estate away from debtors. We will generally refer to all involuntary losses of property to creditors as foreclosures, even though they might technically be separated into foreclosures, judgment executions, tax sales, Internal Revenue Service (IRS) seizures, and bankruptcy auctions, to name a few.