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Difference between REO and Foreclosure? Short Sale or Bank owned?

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al002kim

Thread Starter
Sophomore Member
Joined
Nov 30, 2007
Professional Status
Certified Residential Appraiser
State
California
Hey folks another dumb question...
What's the term when a house is possessed by banks? FORECLOSURE?
and when someone buys a house owned by banks? REO SALE? Bank Owned Sale?
Please advise me~~
FORECLOSURE-
REO-
SHORT SALE-
BANK OWNED-

THANKS!!
 

Zmcraney

Junior Member
Joined
Oct 17, 2007
Professional Status
Licensed Appraiser
State
Mississippi
Foreclosure is the process by which it changes from the owner to the bank if I'm not mistaken
 

Zmcraney

Junior Member
Joined
Oct 17, 2007
Professional Status
Licensed Appraiser
State
Mississippi
Short sale means they sell it for less than what is owed to get it off their books if I remember right
 

Zmcraney

Junior Member
Joined
Oct 17, 2007
Professional Status
Licensed Appraiser
State
Mississippi
Bank owned and REO are basically the same term to me
 

JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
Foreclosure is the process of the bank taking ownership of the house.

Once the house has been foreclosed, it is considered REO or Real Estate Owned.

A short sale is when the owner negotiates with the bank to sell the house for less than is owed. This is done to avoid foreclosure.

Bank owned is an REO.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Foreclosure is the process of the bank taking ownership of the house.

Once the house has been foreclosed, it is considered REO or Real Estate Owned.

A short sale is when the owner negotiates with the bank to sell the house for less than is owed. This is done to avoid foreclosure.

Bank owned is an REO.

Yes! ! ! ! ! ! ! !
 

al002kim

Thread Starter
Sophomore Member
Joined
Nov 30, 2007
Professional Status
Certified Residential Appraiser
State
California
Thank you very much ~~~
Good times!
 

hglenbetts

Senior Member
Joined
Dec 3, 2007
Professional Status
Certified Residential Appraiser
State
Michigan
Foreclosure is the process of the bank taking ownership of the house.

Once the house has been foreclosed, it is considered REO or Real Estate Owned.

A short sale is when the owner negotiates with the bank to sell the house for less than is owed. This is done to avoid foreclosure.

Bank owned is an REO.

The only thing I would add, is that I see REO (real estate owned) used in this market also for Corporate owned properties. A lot of those in SE Michigan where G.M. and the rest buy the homes of the employees they transfer out of State.:fiddle:
 

Brad Ellis

Senior Member
Joined
Feb 7, 2006
Professional Status
Certified Residential Appraiser
State
California
al kim,

You will see more and more of this- here is the process:

Default- the stage at which the lender has declared the debt payment past due (most- over half get cured)

Foreclosure- the process of the lender taking the property. Each state has a different procedure. Generally DURING this period is when you find the property being offered for sale for less than the mortgage balance in hopes that the lender will take less than full debt- this is called a

Short Sale or Short Payoff

Once the lender becomes the owner (and they can be over bid at the sale so they might not actually get the property but will then get the foreclosure proceeds) it becomes

REO- Real Estate Owned (some financial reports call this OREO- Other RE owned to differentiate it form operational buildings used by the lender). Bank owned is merely another term for this.

Brad
 
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