When the building listed for sale is mortgaged by the seller to the bank and becomes collateral, the bank has the right to dispose of the collateral when the building fails to repay on schedule. At this time, if the seller fails to repay the loan as scheduled, the bank can auction the building publicly and use the auction proceeds to make up for the seller's arrears. This kind of mortgage with real estate, and then unable to repay the money due to debt problems, eventually led to the bank's forced auction of the building, and the settlement of debt is called "foreclosure."

Mortgage loan is an emergency loan. The borrower applies for a loan from the bank before the auction, and takes the building to be redeemed as collateral to obtain certain funds to redeem the auctioned building. If the auction fails, the borrower can repay the loan and redeem the mortgaged house within the specified time. At this point, the borrower needs to repay the loan borrowed by the bank again as agreed. If the bank has successfully sold the collateral, the borrower needs to bid for the collateral to redeem it.

There are some risks in the redemption loan, such as the fluctuation of house price, and the value of the redeemed house is not as high as before, which may not only lead to the borrower's failure to repay the loan to the bank in time, but also lead to the failure of the auction, and the house is taken back by the bank or the auctioneer, thus causing the borrower to lose money. Therefore, when borrowers consider using foreclosure loans for foreclosure, they need to fully understand the market situation and risks, and make adequate capital planning and risk control.