A foreclosure occurs when a lender files a complaint against the property owner because the homeowner has defaulted on the mortgage loan. The lender may begin the foreclosure process in order to rectify the debt. In this case, after filing a complaint, the lender may arrange a foreclosure sale of the homes and auction it off to the highest bidder. Attending these auctions and buying foreclosure homes can be a great way to obtain a home for a price below its market value.
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