Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.
Foreclosure
Foreclosure is the legal process by which a lender enforces a mortgage or deed of trust after default, selling the secured property to satisfy the debt when the borrower fails to cure delinquency or reinstate the loan under state procedures.
Exam context
Match foreclosure to lender enforcement of a secured loan after default. Distinguish from eviction of tenants, tax sale of delinquent property taxes, and voluntary deed-in-lieu transfers before sale.
How foreclosure proceeds
After notice of default and acceleration, the lender follows statutory steps that may include court supervision in judicial foreclosure states or trustee sale notices in power-of-sale states. Borrowers may reinstate by paying arrears, fees, and costs before sale in many jurisdictions. The winning bidder receives a deed subject to senior liens and any redemption rights.
Agent and investor roles
Licensees marketing preforeclosure or auction properties must disclose occupancy, lien priority, and that they cannot give legal or loan workout advice. Short sales and deeds in lieu are negotiated alternatives that may avoid public sale but still require lender approval and can affect credit differently than completed foreclosure.
Examples
Trustee sale
A borrower misses 90 days of payments in a nonjudicial state. The trustee posts, records, and holds a public auction on the courthouse steps unless the owner reinstates the loan first.
Deficiency after sale
The foreclosure sale brings $280,000 on a $320,000 debt. Whether the lender may pursue a personal deficiency judgment depends on state anti-deficiency rules and whether the loan was purchase money.
Keep studying
Related terms
- Delinquent mortgageMissed payments that typically precede formal foreclosure.
- Defeasance clauseNote provision voiding the lien when the debt is paid.
Related resources
- Free exam prep
Practice related licensing questions with instant feedback.
- Real estate glossary hub
Browse all published national glossary entries.
- Florida exam topic hub
Florida-specific explainers and question sets for this topic area.
Sources
- CFPB: foreclosure process(Consumer Financial Protection Bureau)