Terms you should know:1. Distressed Property: Th is term refers to all pre-foreclosure and foreclosed
property.
2. Notice of Default: Th e homeowner has missed one or more payments and
gets this letter saying the lender will foreclose. Th e time period from notice
of default to foreclosure is called pre-foreclosure.
3. Short Sale: Th e lender agrees to settle for less than the full amount due
on the homeowner’s mortgage. Th is may happen any time during the preforeclosure.
4. Foreclosure: Th e process by which the lender takes property from the
owner for failure to pay; also the term to describe the foreclosed property
itself (a foreclosure).
5. Auction: Foreclosed property is normally off ered at auction fi rst—auctions
are run either by local government (city or county) or by an auction
vendor.
6. Bank Owned or REO (real estate owned—a banking term): Foreclosed
property that is not sold at auction returns to the lender (bank). Th e lender
usually hires an asset manager who lists the property with an agent.
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