Foreclosure can occur. Foreclosure is the legal means by which your lender can repossess (or take back) your home. When this happens, you must move out of your home. If your property is worth less than the total amount you owe on your loan, your lender or HUD could seek a “deficiency judgment.” This means that in addition to losing your home, you still owe your lender the additional debt and will be required to pay it back.
Foreclosure is one of the most damaging things on your credit report and can seriously affect your ability to qualify for credit in the future so it should be avoided if at all possible.
