Bank Owned Properties

Bank Owned Properties, also known as real estate owned (REO) properties, are properties that are taken into a bank's inventory, after a foreclosure sale.

Bank-owned property are acquired by a financial institution when a borrower does not make their mortgage payments. These properties then sell at a discounted price, much lower than current home prices.

This type of property is taken back by lenders during foreclosure. Lenders and banks with the highest bid in a foreclosure gain the rights to obtain the property.

Bank-owned properties tend to have low interest rates and low down payments. Large national lending institutions have departments called loss mitigation departments, that sell these properties.

U.S. Foreclosures Hit 8 Year Low

Foreclosure activity across the United States dropped to an eight-year low in May as banks reclaimed fewer homes and foreclosure starts saw their lowest levels in years, RealtyTrac said in a report on Tuesday.

RealtyTrac, which tracks and maintains housing market data, said 109,824 properties across the country were at some stage of the foreclosure process in May. That marked a 5 percent decline from April and left foreclosure activity -- foreclosure notices, scheduled auctions and bank repossessions -- 26 percent below the year-ago level.