The Federal Reserve is the central banking system of the United States. It uses a technique called monetary policy to control various aspects of the economy. These aspects may include stabilizing economic growth, lowering unemployment, or even maintaining predictable exchange rates with other currencies.
When a home owner is unable to make their mortgage payments, their house may go into foreclosure. Foreclosure is the legal process that allows a lender to take ownership of a home and sell it at auction in order to satisfy the debts owed by the borrower. Foreclosures can have a profound and lasting impact including a 200 to 300 point drop in credit score that stays on your credit report for up to seven years.