In what situation would a foreclosure occur?

A foreclosure occurs when a borrower fails to make mortgage payments, which leads the lender to initiate legal proceedings to reclaim the property through the sale. This situation typically arises when the borrower is in default, meaning they have not made the required payments as per the loan agreement. The lender's objective is to recover the amount owed by selling the property, as the mortgage secures the debt against the real property.

Each of the other scenarios would not result in a foreclosure. Selling a property for a higher price indicates a successful transaction, while renovations made to a property typically enhance its value and do not involve the lender's intervention. Lastly, tenants refusing to leave a property may lead to eviction proceedings but are distinct from foreclosure, which relates to the owner's mortgage obligations. Understanding these concepts is crucial for navigating real estate transactions and the implications of mortgage default.