This is according to California practices.
The progression is short sale, foreclosure, REO..
A homeowner that falls behind in their mortgage is served with a NOD, or Nortice of Defualt, within a couple of months of a missed payment. This varies with lenders...some may issue this notice right after a missed payment..
After 3 months of recording the NOD a sale date is set.
20 days before the sale 'Notice of Trustees' sale is posted and publiushed.
Five days before the sale date the homeowners right to reinstate expires.
The home becomes bank owned or REO (real estate owned.) An attempt is made to sell it at auction on the 'courthouse steps' If not sold the lender tries to market it generally by placing it with a real estate company.
Hope this helps! Feel free to contact me with any other questions.