A mortgage foreclosure is a legal process that occurs when the borrower does not make the payments as agreed to in a mortgage loan. When the foreclosure takes place the borrower loses all rights to the property and is forced to vacate. This process can take several months and up to a year or more in some areas. When the borrower defaults on a mortgage loan, the lender usually first notifies the borrower of their options. If the loan remains in default, the lender begins mortgage foreclosure proceedings in accordance of the laws of the state in which the property is located. The lender takes possession of the property and often sells the real estate in an auction. The proceeds are applied to the loan balance due the lender and often the difference or loss is either written off or assigned to collections. A mortgage foreclosure can negatively affect the borrower's credit rating and stay on the credit report for years.