Define the term 'foreclosure'.

The term 'foreclosure' refers specifically to the legal process in which a lender takes possession of a property because the borrower has failed to fulfill their repayment obligations, particularly by not making required mortgage payments. This process typically begins after several missed payments and can involve legal proceedings to reclaim the property that serves as collateral for the loan. Once the foreclosure is finalized, the lender may sell the property to recover the amount owed on the mortgage.

This definition highlights the key points that differentiate foreclosure from other concepts related to property transactions. For example, while selling property at auction may occur during the foreclosure process when the property is sold to recoup losses, simply describing a process of auctioning does not encompass the legal ramifications involved in foreclosure. Likewise, a voluntary sale by the owner is not a foreclosure, as it involves the owner willingly selling the property rather than having it seized due to default. Lastly, assessing the market value of a property is unrelated to foreclosure, as it pertains to determining a property's worth rather than the legal repercussions of a defaulted mortgage.