Foreclosure step includes:
(1) pre-foreclosure, short sale, owner can't pay mortgage and try to sell home to pay off mortgage.
(2) deed of trust sale, owner can't pay mortgage, the bank is trying to sell the house. Titles are muddy because the house might have second/third mortgage, liens etc.
(3) foreclosure, change of owner from owner to real estate owned. Titles and liens are cleared up.
(4) REO auction, bank trying to sell REO real estate. Titles are usually clean.