Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Nebraska, foreclosure is a judicial process, meaning that the lender must go through the courts to terminate the homeowner's interest in the property. When a homeowner defaults on their mortgage payments, the lender can file a lawsuit to initiate the foreclosure. The process begins with the lender filing a complaint in court and serving the borrower with a notice. The borrower is given an opportunity to respond and raise defenses. If the court finds in favor of the lender, it will issue a decree of foreclosure and order the sale of the property. The property is then typically sold at a public auction, and the proceeds are used to pay off the mortgage debt. If the sale proceeds are insufficient to cover the debt, the lender may obtain a deficiency judgment against the borrower for the remaining amount. Nebraska law also provides a redemption period, which allows the homeowner to reclaim the property by paying the full amount owed before the foreclosure sale. It's important for homeowners facing foreclosure in Nebraska to consult with an attorney to understand their rights and any potential defenses they may have.