The foreclosure process begins when a homeowner fails to make mortgage payments. The lender typically sends a notice of default, informing the homeowner of the missed payments and the potential for foreclosure. This notice is often followed by a grace period during which the homeowner can catch up on payments to avoid further action. If the homeowner does not resolve the situation, the lender may proceed with foreclosure, which involves selling the property at a public auction. The proceeds from the sale are used to pay off the remaining mortgage balance, and any excess funds may go to the homeowner, depending on local laws.