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May 12, 2009
Bank owned property refers to foreclosure real estate that has been returned to the lender. When homes fall into foreclosure they are placed for sale through public auctions. If no one bids on the property it is given back to the bank. At this stage, the property is referred to as real estate owned, or REO, property.
Bank owned property can consist of houses, condos, manufactured homes, mobile homes, commercial properties or raw land. REO properties are sold through each lender's loss mitigation department. Many lenders present bank owned real estate via their company website. Others retain the services of a realtor who specializes in distressed properties.