Foreclosure is described as a right to repossession on a property. This happens when an individual has taken a loan on property by mortgaging it, or has purchased the property through a loan, and was not unable to pay for the monthly repayment installments. Most of the time, the borrower is a house owner who had acquired the property via the aid of loans. As soon as the borrower fails to pay the loan amount, he will get a "default" status. If the borrower who defaulted has no other means of paying-off the loan, the property is taken-over and sold by the lender to recover the loan amount. This results in a decrease in credit rating for the borrower who will find it hard to get approved of loans, eventually. 

Non-judicial foreclosures involved having the final decision being undertaken by the lender. The foreclosure will be handled all throughout by a public auction system. The auction is held at the court hall. This process till involves legal formalities between the lender and the borrower. The person who is purchasing a repossessed property in an auction can buy the property at a lesser auctioned price compared its market value. 

Property owners, as much as possible, avoid the long and complicated procedures involved in foreclosures. This is mostly true especially to the borrowers who have a history of bad credit since they will find it very hard to avail of loans in the future. There are financial institutions that assist individuals who are dealing with foreclosures, but the catch is the interest rates can be very high for them due to the fact that they have a poor credit record. On the bright side, an individual can purchase a high-value property at a lower cost at foreclosure auctions or sales. The purchaser of the foreclosed property can, in turn, sell off the property at a higher rate.