Define "foreclosure."

Foreclosure refers to the legal process by which a lender takes possession of a property due to the borrower's inability to meet the mortgage obligations. This typically occurs when a homeowner defaults on their loan payments, leading the lender to initiate legal proceedings to reclaim the property. The goal of foreclosure is to recover the amounts owed on the defaulted loan by selling the property, often at a public auction.

In this context, the other choices do not accurately define foreclosure. The first option describes a voluntary process, which is not in line with the involuntary nature of foreclosure. The third option relates to loan modifications, a completely different scenario where parties negotiate to alter the terms of a loan, rather than reclaiming property. Finally, the fourth choice refers to appraisals, which assess property value and do not involve the lender reclaiming the property through legal means. Thus, the definition of foreclosure is clearly framed as the lender's legal right to take possession of a property when mortgage terms are not upheld.