Foreclosure is a situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract.
There are a host of reasons why sellers may stop making their mortgage payments. Here are a few:
- Quitting their job or being laid off.
- Sickness and disability
- Excessive debt
- Unaffordable maintenance issues
For sellers facing foreclosure, negotiating directly with the lender may result in a workable solution.
Foreclosure is also called repossession, in Quebec. Repossessed properties may be acquired under market value, since they are sold by the bank rather than directly by a seller.