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A forclosure occurs when a homeowner defaults on a mortgage loan and the lender pursues a sale of the homeowner's property in order to satisfy the outstanding debt. After a complaint has been filed with the proper authorities, the forclosure property is auctioned off to the highest bidder. Forclosure sales of this kind can be a very frugal way for homebuyers and investors to purchase property, since it is often sold for far less than its true market value.
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