Real Estate Owned: Houses Foreclosed by Banks
Real Estate Owned in Perspective
The government foreclosures occurring in the US are variously accounted for by several agencies. Several of the properties are seized by VA {Department of Veteran Affairs} and HUD {Department of Housing & Urban Development}. The government had a few months back taken over the mortgage giants Freddie Mac {FHLMC or Federal Home Loan Mortgage Corporation} and Fannie Mae {FNMA or Federal National Mortgage Association}, and these are also responsible for a huge share of the foreclosure filings.
In addition, banks represent a major share of the total foreclosures in the nation. These are referred to as real estate owned or, more commonly, as just REO. The share of REO in the total national foreclosures during Q1 or the first quarter of 2009 has been 190,543 houses out of a total of 803,489 foreclosure filings that were filed. This category represents roughly 25 percent of the national total.
Real Estate Owned Attracts Buyers
Such REO properties merely represent NPOs or nonperforming assets to the banks. The banks are, therefore, keen to get rid off the seized homes for whatever liquid assets that they can fetch at the foreclosure auctions. REO is attractive to the buyers because these are houses clear of any liens or encumbrances. The buyers typically trust reputed banks. Besides, the auction procedures are simple, transparent and fair to the bidders. The houses auctioned by banks find ready bidders and buyers.
Banks generally require 10 percent of the winning bid amount to be deposited as down payment to finalize the deal. However, the ongoing times are witnessing rapid federal developments that seek to bolster property sales and buoy the economy up. Among the initiatives being discussed is one that does away with the legal requirement of the down payment to be made by the buyer. However, there are umpteen mortgage companies eager to lend you all the finance that you might need at flexible terms. Real estate owned represents an excellent opportunity for you to buy a gorgeous at an alluringly discounted price.