What is an REO?

by Matthew on May 25, 2011

Real estate owned, or REO, is a class of property owned by a lender, typically a bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the beneficiary will legally repossess the property. This is commonly the case when the amount owed on the home is higher than the current market value of this foreclosure property, such as with a high loan-to-value mortgage following a real estate bubble. As soon as the beneficiary repossess the property, it is listed on their books as REO and categorized as an asset (non-performing).

The term REO originates from the Generally accepted Accounting Principals (GAAP) term Other Real Estate Owned (OREO) used on financial statements as a classification of real property owned by an entity which is a financial institution not directly related to its business. In balance sheet terms, OREO assets are considered non-earning assets for purposes of regulatory accounting. The term OREO is legally defined by the Office of the Comptroller of the Currency in 12 USC 29.

San Diego REO

by Matthew on April 20, 2011

Looking for San Diego REO’s?  Executive Realty Group specializes in REO sales.

With more than 20 years of combined experience, we know the REO process. Executive Realty REO has the skills, the professional contacts and the know-how to effectively manage the complexities of REO (Bank-Owned) property transactions and successfully close deals.