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 New Hampshire, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to the borrower's failure to make the required mortgage payments. New Hampshire primarily uses the non-judicial foreclosure process, which means that the foreclosure does not need to go through the court system if the mortgage contains a power of sale clause. This clause allows the lender to sell the property without court intervention after providing proper notice to the borrower. However, if the mortgage does not contain this clause, the lender must pursue judicial foreclosure, involving the court system. The lender must provide the borrower with a notice of default and intent to foreclose and must advertise the foreclosure auction in a newspaper for three consecutive weeks before the sale. The borrower has the right to reinstate the loan up until five days before the foreclosure sale. If the property is sold, the proceeds go towards paying off the mortgage debt, and any surplus is returned to the borrower. If the proceeds are insufficient to cover the debt, the lender may seek a deficiency judgment against the borrower for the remaining amount.