When a loan is secured by property, and if the borrower fails to make payments, what could the lender initiate?

When a loan is secured by property and the borrower fails to make payments, the lender has the legal right to initiate foreclosure proceedings. Foreclosure is the process by which the lender takes possession of the property used as collateral for the loan. This typically occurs after the borrower has missed several payments and the lender has made attempts to collect the overdue amounts.

Foreclosure allows the lender to recover the outstanding debt by selling the property, which can be done through a public auction or a sale of the property to another party. The goal of foreclosure is to enable the lender to recoup its losses by converting the collateral (the property) into cash, thereby satisfying the mortgage obligation that the borrower has defaulted on.

Other options, such as forbearance agreements, loan modifications, and debt restructuring, represent alternatives that may be offered or discussed as potential solutions to avoid foreclosure. These options focus on changing the terms of the loan or providing temporary relief from payments but do not involve seizing the property. However, they typically require cooperation from the borrower and may not be initiated if the borrower is already seriously in default.