REO Properties, Bank-Owned Properties, and Foreclosure Homes no matter how you word it all refer to the same type of property. The buyer did not pay the mortgage and the mortgage holder had to go through legal proceedings to get control of the property and is now trying to liquidate the asset.
REO is an acronym for Real Estate Owned meaning it is now owned by the bank. Foreclosure is the process the bank takes to gain ownership of the home.
Here is the wiki link for foreclosure