Foreclosure happens when a borrower fails to pay their mortgage payments and the lender or mortgage investor must repossess and then sell the home. Foreclosure can also happen when the homeowner fails to pay their property taxes or homeowners association fees.

Is it bad to buy foreclosures?

Buying a foreclosed home can be a good idea if you have the financial cushion to absorb any potential problems. If you aren't worried about there being potential issues or the cost to repair them, then buying a foreclosed property is likely a worthwhile investment for you.

What happens when your house is in foreclosure?

When a property is foreclosed on, the bank (or the lender) takes control of the property. ... This is where foreclosure auctions come in. A foreclosure auction occurs when the mortgagee takes control of the property and wants to sell the property.