What happens to a property during the foreclosure process?

The foreclosure process occurs when a borrower defaults on their mortgage payments, leading the lender to take action to recover the outstanding debts. In this situation, the correct answer is that the lender assumes ownership after the borrower defaults on payments.

When a borrower fails to meet their mortgage obligations, the lender has the legal right to initiate foreclosure proceedings. This process typically involves taking the property back from the borrower through legal means, allowing the lender to reclaim their investment. Once the foreclosure is completed, the lender then becomes the rightful owner of the property.

This answer reflects the fundamental principle that foreclosure represents a transfer of ownership from the borrower to the lender when the borrower can no longer make payments. Understanding this process is essential for those involved in real estate, as it illustrates the consequences of mortgage default and the rights of lenders in protecting their financial interests.