Real estate owned (REO),
Definition of Real estate owned (REO):
Real estate owned (REO) is property owned by a lender, such as a bank, that has not been successfully sold at a foreclosure auction. A lender—often a bank or quasi-governmental entity such as Fannie Mae or Freddie Mac—takes ownership of a foreclosed property when it fails to sell at the amount sought to cover the loan.
When a borrower defaults on their mortgage, the pre-foreclosure period often involves either a real estate short sale or a public auction. If neither goes through, the foreclosure process can end with the lender—a bank, for example—taking ownership of the property. Banks may attempt to sell REO properties in their portfolios without the help of real estate agents. When this is the case, banks often list their REO properties on their websites. A bank's loan officers may also notify customers looking for homes about the REO properties in its portfolio.
The real estate that a savings institution owns as a result of foreclosure on borrowers in default; properties that did not sell at foreclosure auction and have reverted to ownership by the lender.
How to use Real estate owned (REO) in a sentence?
- REOs are often sold at a discount by banks and other lenders. However, they are usually sold "as is" and are often in disrepair.
- Banks attempt to sell their REOs using a real estate agent or by listing the properties online.
- Real estate owned (REO) is the term for a property owned by a lender because it failed to sale in a foreclosure auction after the borrower defaulted on his or her mortgage.
Meaning of Real estate owned (REO) & Real estate owned (REO) Definition