Foreclosure: A legal process that involves extinguishing the rights of the owner in order to sell the property to satisfy a lien, which is usually a mortgage on the property that is in default.
Pre-Foreclosure: An investor buys the property directly from a property owner who has fallen behind on the mortgage but has not yet been seized by the bank.
Auction or Trustee Sale: After the property owner has defaulted on the mortgage, the property is sold by the lender to the highest bidder at a public sale.
Redemption Period: A period of time where the property owner can buy back their property after it's sold at auction. Not all states offer a redemption period.
REO (Real Estate Owned): If the property is not sold at auction, it becomes 'real estate owned' by the lender or bank. Real Estate Owned sales are usually handled by real estate brokers.
Hud Foreclosure: An auction of homes whose loans were guaranteed by the U.S. Department of Housing. There's an Offer Period, during which sealed bids are accepted from your agent. HUD will generally accept the highest bid, or the bid that brings them the highest net.
Notice of Default: A written document that gives constructive notice of a property owner's failure to pay the mortgage.
NOTICE OF RESCISSION: A written document that cancels or annuls the effect of a notice of default when a default has been reinstated.