Guides

The words people use about your house

Investors sort distressed homes into categories. If your home is in one of them, here is what each word actually means for you, and what you can still do.

Pre-foreclosurePre-foreclosure is the window between falling behind and the sale. What the law gives you in that window, what the letters are, and what to do first.Short saleHow a short sale works, what to get in writing so the shortfall does not follow you, the tax question, and how it compares with a foreclosure.AuctionWho bids at a trustee or sheriff sale, what the lender bids, what happens to money left over, and whether you can still get the house back.Bank-owned (REO)What REO means, what happens if you still live in the house after the bank takes it, cash for keys, tenants, and what you might still owe.Tax liens and tax deedsThe two ways states sell homes for unpaid property tax, how redemption works, and your right to the equity above the tax debt.Heirs' propertyWhat heirs' property is, why it is at risk of foreclosure and forced sale, and the federal protections for family members who are not on the loan.Two kinds of foreclosureSome states send foreclosure through a judge and some do not. See both roads side by side, which kind your state uses, and what it changes for you.Surplus moneyWhen a foreclosure or tax sale brings in more than the debt, the extra money can belong to you. How it works, how to claim it, and how to avoid fee traps.Scams to avoidThe common scams aimed at homeowners who are behind, the red flags, what to do instead, and where to report one.Credit and taxesHow long a foreclosure stays on your credit report, when you can get another mortgage, and the tax question about forgiven debt.

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A HUD-approved housing counselor is free on 1-800-569-4287. This site is general information, not legal advice.

Last verified: October 18, 2026. Every deadline and citation on this page was checked against the statute or rule it cites. Laws change during the year, so if something here looks out of date or wrong, tell us and we will check it against the law.

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