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.

Carlisle Mitchell - Real Estate & Investing News

Carlisle Mitchell - Real Estate & Investing News


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Short Sales

Short sales are purchases negotiated with the owner and lender(s) before foreclosure. Typically the purchase price negotiated is less than the balance owed on the property.

For investors, short sales present an opportunity to buy real estate below market value and help borrowers to avoid foreclosure.