Foreclosure property is being sold with Fannie Mae sometimes paying up to 3% of the buyers closing costs. Foreclosure Real Estate can be purchased directly from banks and thru auctions. A  Foreclosure on your credit report can damage your credit rating and your ability to buy a home in the future. Foreclosure is the most challenging issue against a security clearance and is something you want to avoid so you might want to check out your options from a professional real estate agent. Foreclosures definition : the legal proceedings initiated by a creditor to repossess the property for loan that is in default.