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Simple English definitions for legal terms
REO
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A quick definition of REO:
Term: REO
Definition: REO stands for Real Estate Owned. This means that a property, such as a house or a piece of land, is owned by a bank or a lender because the previous owner was unable to make their mortgage payments. The bank or lender then becomes the owner of the property and can sell it to recoup their losses.
A more thorough explanation:
REO
REO stands for Real Estate Owned. It refers to a property that is owned by a bank or lender after it has been foreclosed on and failed to sell at a foreclosure auction.
For example, if a homeowner defaults on their mortgage payments and the bank forecloses on the property, the bank may then take ownership of the property and list it as an REO property for sale.
Another example is if a property is purchased with a mortgage and the owner fails to make payments, the lender may foreclose on the property and take ownership, making it an REO property.
REO properties are typically sold by the bank or lender at a discounted price in order to recoup some of their losses. These properties can be a good opportunity for buyers looking for a deal, but they may also require some repairs or renovations.