Economic Recession: Defining Foreclosure (Part 2)

One of the inevitable effects of the economic recession that hit not only the common American but many people as well is foreclosure. But what is foreclosure?

Many people dream of owning his very dream home but with the economic growth slowdown, most people find it impossible to afford the dream home with a single cash pay-out. Therefore, this results to many applying for loan to have the house without even considering one's capacity to make up the loan in the long run. When the debtor failed to pay or make up with the payment of the loan, such default can lead to foreclosure.

Foreclosure is the term used to “a procedure by which the holder of a mortgage—an interest in land providing security for the performance of a duty or the payment of a debt—sells the property upon the failure of the debtor to pay the mortgage debt and, thereby, terminates his or her rights in the property.”

Foreclosure has many types depending on the nature of the loan, in the next postings, we will discussed the types of foreclosure and how it lead to economic recession.