Friday, January 5, 2007

What is an REO?

REO properties, or bank owned properties, are properties that are owned by banks because they have foreclosed on mortgages. The banks do not like to have these REO properties in their possession for different reasons:

  • REOs reflect badly on the bank for having made bad lending decisions.
  • REOs require maintenance that banks are not equipped to provide.
  • REOs are expensive to maintain. They need to pay for insurance, taxes, maintenance, etc.

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