Foreclosure Summary
Pre-Notice of Default
At this stage, the property owner is behind 2-3 payments. A "Notice of Default", is usually sent out by the bank or mortgage company after the 4th mortgage payment is missed, but they technically have the right to send it after only 1 missed payment if the choose.
Pre-Foreclosure
This period is after the bank has issued the "Notice of Default", but before the actual sale. This is the period most commonly known as "In Forclosure." Upon sending the "Notice of Default", the foreclosure is now public notice.
Foreclosure Auction Sale
This is the actual sale of the property on the courthouse steps. The bank usually tries to get the balance of the mortgage and any other costs it has incurred in obtaining the property from the sales proceeds.
REO's or Real Estate Owned Properties
If the property does not sell at the auction, and most times it does not, the bank then owns it. The bank incurs more expenses, management, legal, administrative, fixup etc. Then they attempt to sell it, usually through a broker it has retained for this purpose.