What happens during the foreclosure process?

During the foreclosure process, the lender takes possession of the property due to the borrower's failure to make the required mortgage payments. This legal process allows the lender to reclaim the property to recover the outstanding loan amount. Foreclosure typically occurs after several missed payments, and it involves a series of legal steps that culminate in the lender acquiring ownership of the home, which can then be sold to pay off the debt owed by the borrower.

The other scenarios presented do not accurately reflect the foreclosure process. Negotiating new terms with the borrower usually occurs before foreclosure, aiming to avoid the loss of the property. Selling the property without lender involvement suggests a voluntary sale, which is not characteristic of foreclosure, as the lender is primarily taking action due to default. Lastly, while the homeowner may receive funds in other circumstances, such as a short sale or home sale, this is not part of the foreclosure process itself, where the lender's focus is on recapturing the owed amount rather than providing funds to the homeowner.