A court action to obtain the title to a property when the owner defaults on a covenant in their loan contract.

If the foreclosure is successful and the lender obtains the title to the property, they own it outright and can choose whether to sell the property or keep it.

If the lender chooses to sell the property, there is no obligation to pay any amount to the previous owner.

Note: since the mortgage crisis in the United States, many people in Ontario have been using the wordforeclosurewhen they actually mean power of sale, which is a forced sale to a third party.

Search dictionary: or ask Peter!

Get monthly real estate advice in your inbox, free! privacy policy