In real estate, a decree of foreclosure is a court-issued order that directs the sale of a mortgaged property to satisfy an outstanding debt owed to the lender. This legal action occurs when a borrower fails to meet their mortgage obligations, such as missing payments or defaulting on the loan. The decree authorizes the property to be sold—often at a public auction—with the proceeds applied first to the outstanding mortgage balance, interest, and any associated costs.
The decree of foreclosure formalizes the lender’s right to recover the owed debt and provides a legal mechanism to transfer the property to a new owner if the sale proceeds cover the debt. It ensures the foreclosure process follows judicial procedures, protecting the rights of both the lender and the borrower under applicable laws.
