What does it indicate when a property is "in foreclosure"?

When a property is "in foreclosure," it signifies that the owner has defaulted on their mortgage payments, leading the lender to take legal action to reclaim the property. This typically occurs when the homeowner fails to meet the repayment schedule agreed upon in the mortgage contract. The lender initiates foreclosure proceedings to recover the remaining balance on the loan by selling the property.

During this process, the lender may sell the property through a public auction or might list it with real estate agents to find a buyer. The primary goal in this scenario is to recoup the financial loss incurred due to the unpaid mortgage. This situation reflects bankruptcy or significant financial distress on part of the homeowner, as opposed to renovations or investment activities, which do not imply a state of default or legal reclamation of property.