Which legal process allows a lender to take control of a property due to borrower default?

The legal process that allows a lender to take control of a property due to borrower default is known as foreclosure. This process is initiated when a borrower fails to meet the repayment terms of their mortgage loan, typically after several missed payments.

During foreclosure, the lender may seek to recover the remaining balance of the loan by forcing the sale of the property that was used as collateral. The process begins with the lender filing a lawsuit against the borrower, followed by notices to the borrower about the default and eventual sale of the property. Through foreclosure, the lender can reclaim the property, thus mitigating their financial losses resulting from the borrower's inability to repay the loan.

Other terms like repossession and liquidation can also be related to financial distress but do not specifically refer to the legal process involved in reclaiming property due to mortgage default. Repossession generally applies to personal property rather than real estate, while liquidation refers to the process of selling off assets to pay off debts and is broader in scope than just addressing foreclosures.