Final answer:
The legal proceeding described is a foreclosure process, where the amount due on a mortgage is established and the borrower must pay by a deadline or face loss of property rights.
Step-by-step explanation:
The legal proceeding in which the amount due on a mortgage is determined and the borrower is given a deadline to pay is known as a foreclosure process. If the borrower fails to pay the mortgage by the deadline, their rights to the property are terminated, and the title is transferred to the creditor. This process is a way for lenders to ensure that they are able to recover the money owed to them.
Mortgages are typically issued for either 15 years or 30 years. The lender makes sure that the borrower is capable of making payments by requiring a down payment, usually around twenty percent of the home's purchase price. If the borrower defaults on their loan payments, similar to a bank loan for a firm, the lender has the right to take legal action to recover the outstanding debt, which can include the sale of the property.
It is important to understand how the primary and secondary loan markets work in conjunction with these mortgages. Banks often sell the mortgage loans to other financial institutions, who then receive the loan payments from the borrowers.