| REO homes is an acronym for Real Estate Owned | | | | the individuals in the specified deadlines. So the leading |
| homes. It is also known as Banks Foreclosures. It is a | | | | financial institutions like banks takes harsh step to |
| scenario where the property is owned by the banks. | | | | auction it to get backs it money owed to it by the |
| Upon the forfeiting of the mortgage agreement signed | | | | borrowers. In the auction conducted by the banks in |
| between the two entities i.e. the bank which acts as | | | | public lot of real Estate agents, investors try to bid for |
| lender and on the other hand borrowers, the property | | | | it to get the upper hand. If the auctioned REO homes |
| is mortgaged by the borrower as the security with the | | | | are not in proper condition then the banks have to |
| financial institutions like banks is auctioned and the | | | | bear the cost on its own to resell it in the public to get |
| banks or the lender is forced to buy back the property. | | | | back at least good portion of the loaned amount. In |
| Usually in these scenario banks then re-auctions it in | | | | these auctions of REO homes real profiteers are the |
| public for gaining back the amount being lent to the | | | | Real Estate agents who bid for these auctioned |
| borrower, which also covers the interest charged by it | | | | properties. Since the banks don't like to keep these |
| on the principal amount. | | | | properties with them they have to dispose it off |
| REO homes also provide lot of opportunities for Real | | | | anyway from their side. Now a days there is a huge |
| Estate agents. When the borrower forfeits the mutual | | | | increase in the auctions of REO homes in the |
| agreement signed by it with the banks while | | | | developed countries like US. |
| undertaking especially home loans, the property is | | | | REO homes are being auctioned more frequently .The |
| auctioned by the bank. After an unsuccessful auction | | | | bidders have to be careful in bidding these the |
| for REO homes where the lender usually the banks | | | | properties. These bidders must properly analyze the |
| have to buy back the property. Then the banks | | | | properties and check their maintenance costs involved |
| auctions it to regain the amount it lent as home loans. | | | | in them before going for final bid. In most of these |
| Since the banks don't like to keep the properties with it | | | | REO homes auctions the bidders have upper hand |
| ,the big players like real Estate agents come into the | | | | and are gainers as they always buy at lower cost and |
| scene where they have lot of opportunities to buy the | | | | resell them to interested parties at higher value to gain |
| property at low cost and resell according to their | | | | profits on it. Although REO homes auctioning business |
| convenience to get the profits. | | | | have added to the woes of the borrowers of the |
| REO homes rather bank foreclosures are the end | | | | bank it has undergone a rapid and major profitable |
| results of non repayment of the home loans taken by | | | | business for Real estate agents. |