Foreclosure is the legal and professional proceeding in which real estate owner obtains termination of a right of redemption. In most cases real estate owner obtains a security interest from a borrower who mortgages a house to secure the loan. Courts of equity can grant the borrower the right of redemption if the he repays the debt.
The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien". If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.
The mortgage holder can usually initiate foreclosure at a time specified in the mortgage documents. Within the United States and many other countries, several types of foreclosure exist. Foreclosure by judicial sale, more commonly known as Judicial Foreclosure, is available in every state and required in many, involves the sale of the mortgaged property under the supervision of a court. Foreclosure by power of sale, which is also allowed by many states if a power of sale clause is included in the mortgage or if a Deed of trust was used instead of a mortgage. Under strict foreclosure suit is brought by the mortgagee and if successful, a court orders the defaulted mortgagor to pay the mortgage within a specified period of time. (from Wiki)