It is a legal process by which a lender cancels/ forecloses a borrowers right of redemption of the mortgaged property through a court order. It typically involves a forced sale of the property at public auction with the proceeds being applied to the mortgage debt.
I go with Anumita, but in part. The reason is that the query is about Foreclosure Agreement and not Foreclosure by law. It Would therefore mean an agreement between the lender and borrower by which they agree that borrower's shall no more have the right of redemption.