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Introduction to Debentures

In case of de...

Question

In case of default in repayment of loan, the bank auction the property for sale and recover their money. This procedure is called .

A

back-closure

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B

foreclosure

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C

non-closure

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D

part-closure

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Solution

The correct option is B foreclosure
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

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In case of default, the bank auction the property for sale and recover their money. This procedure is called ___________.

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