What can happen if a borrower fails to make mortgage payments?

When a borrower fails to make mortgage payments, one of the key actions that can occur is that the lender has the right to initiate foreclosure proceedings. Foreclosure is a legal process where the lender seeks to recover the balance of a loan from a borrower who has stopped making payments.

When this situation arises, the lender may pursue foreclosure to take possession of the property. This typically occurs after a series of missed payments, often defined by the terms of the mortgage agreement. If a borrower does not adhere to the repayment schedule, the lender can enforce its interest in the property and begin the process of reclaiming it to recover the owed amount.

While there are options such as loan modifications or interest rate reductions to assist borrowers struggling to make payments, they typically require proactive communication from the borrower and do not automatically occur due to missed payments. In contrast, the initiation of foreclosure is a direct consequence of payment default, making it a likely and serious outcome when obligations are not met. Additionally, property values are generally influenced by various external economic factors and are not directly impacted by an individual borrower's failure to make payments.