What is a foreclosure?

A foreclosure is accurately defined as the legal process by which a lender takes control of a property due to the borrower's non-payment of the mortgage. In this scenario, when a borrower defaults on their mortgage obligations, the lender can initiate foreclosure proceedings to recover the remaining balance of the loan. This process typically ends with the property being sold at auction to satisfy the debt.

Understanding this context is essential. Foreclosure serves as a means for lenders to mitigate losses when borrowers cannot meet their financial commitments. The process involves legal steps that vary by state, including notifying the borrower of the pending foreclosure, allowing a period for repayment if applicable, and then proceeding to sell the property if the debt remains unpaid. This situation can drastically impact the borrower's credit score and financial future, underscoring the serious nature of defaults on mortgage agreements. Other options describe processes or scenarios that do not relate to the essence of foreclosure, clarifying the importance of choice C as the correct answer.