Quezi

You Can find REO's Just About Everywhere (photo: NASA-PD)

REO or real-estate-owned properties are hot commodities these days.  An REO house or other property (such as a plot of land, or a commercial building) is one that has reverted to bank ownership because the original owners defaulted on their mortgage, and the property was not purchased at a foreclosure auction.  In cases like that, the owner of last resort is the bank itself.  Hence, these are also sometimes known as bank-owned properties.

Conventional wisdom has it that REO’s can be purchased at a low price, as the bank is eager to unload the house from its inventory.  Often, this is indeed the case, though just as often, potential buyers are competing against real-estate professionals who specialize in flipping REO’s.

In the US, there are several major holders of REO homes, and they have their own specialized websites where they list available properties.  Among the biggest REO portfolios are:

• Ocwen Financial, a bank services company with one of the largest REO inventories in the nation.
• Bank of America is another large holder of REOs, especially after its acquisition of Countrywide Financial.
• Fannie Mae, the strange private-government hybrid, is still a major source of REO properties despite their overall financial predicament.  Visit their HomePath website for full listings.

There are some serious deals out there, but as always, proceed with eyes open, and with due diligence. 

Best of luck.

David Sarokin