Foreclosure is selling a mortgaged property due to overdue and unpaid mortgage loan. When a home owner failed to pay the mortgage loan intended for the property and it lapses the given deadline of late payment for consecutive months, the property is already foreclosure and the lender will sell it to cope up the amount borrowed even if it is break-even or less. Lender avoids property tax and maintenance of foreclosure property that is why they are selling less than the amount of the balance of the mortgage loan.
When the home owner failed to pay for the mortgage loan for a specific period of time, the bank will re possess the property. Bank will assign the foreclosure property to their agent and conduct a process of securement on the property whether the property is vacant or not. In case that the borrower is still living on the foreclosed property, agent (assigned by lender) will offer cash for keys for them to leave the place and be able to find a new place. Once the property was repossessed by the Lender, the former home owner will be evicted from the house. When the former home owner vacates the house, which is the time the property will be for sale in auction meaning for sale at a lower price.
If the house or the property is not sold at the auction, it will become a REO stands for Real Estate Owned. The property will be for sale at a very low price in possible soonest time to avoid further costs.