Right of Foreclosure

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Right of Foreclosure

The legal right of a mortgage lender to take ownership of a property securing a mortgage if the borrower does not meet the terms of the lending agreement. Most obviously, the right of foreclosure is exercised if the borrower does not pay the mortgage.
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If the property owner is facing foreclosure, the lender may elect to approve a short sale (and write down the deficiency owed by the property owner on the loan) in lieu of exercising its rights of foreclosure.