There are three basic approaches to buying properties in foreclosure depending on the stage of the foreclosure process:
1) buying pre-foreclosures
2) buying at the foreclosure auction
3) and buying from lender after the foreclosure sale.

If you buy from the delinquent property owner before it goes to auction, you have bought a pre-foreclosure deal. Buying at the auction is self-explanatory. If nobody bids, the lender ends up with the property.

Buying from the lender after the auction is called buying REOs (real estate owned)