Foreclosure is governed by state law, different states can observe different foreclosure procedures. In foreclosure, the lender, mortgagee, automatically becomes full owner of the property when a borrower, mortgagor, defaults. The borrower can still pay the full amount and get the house back during the redemption period. If the money is not paid back, you will lose the ownership of the house. Then the house will be sold at a public sale or auction to pay for the full loan amount, if the sale is less than the amount owed, you will owe the difference.