What property status does the term "foreclosure" refer to?

The term "foreclosure" specifically refers to a legal process whereby a lender attempts to recover the balance of a loan from a borrower who has defaulted on the loan payments. When this process culminates, the lender may take possession of the property and the property then enters a state known as "bank owned" or "real estate owned" (REO).

In this state, the property is owned by the lending institution, usually a bank, after it has been unable to sell the property at a foreclosure auction. This reflects the lender’s legal right to sell the property to recover the outstanding debt. The property transitioning into bank ownership signifies that the previous owner no longer has a claim to the property, and it is now under the control of the bank, which will likely sell it on the open market to recoup its losses.

Other statuses mentioned, such as property under renovation, tenanted property, or vacant land, do not pertain to the foreclosure process. Foreclosure strictly involves the transition of ownership from a defaulting borrower to the lender, thereby categorizing it distinctly as bank owned or real estate owned property.