What does the term "foreclosure" refer to?

The term "foreclosure" refers specifically to a legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments. This is accomplished by forcing the sale of the asset used as collateral for the loan, typically the property itself. The lender initiates foreclosure proceedings to take ownership of the property to recoup the amount owed. This is a critical concept in real estate, as it underscores the risks associated with borrowing and lending, and how failure to meet mortgage obligations can lead to significant consequences for property owners.

The other choices do not accurately define foreclosure. Improving property value is not part of the foreclosure process; rather, foreclosure typically diminishes property value due to the distressed nature of the sale. Determining property taxes relates to assessment and valuation, which is entirely separate from foreclosure. Finally, securing a mortgage loan involves the initial arrangements and agreements between borrower and lender but does not pertain to the legal ramifications of defaulting on that loan.