What is REO? What Effect Will REO Have on Housing Recovery?

Real estate owned or REO…is a class of property owned by a lender typically a bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction[1]. When a lender/ beneficiary finishes the foreclosure process the property can then be listed as an REO property.That is the technical definition, however most people know them as foreclosures. Most of the larger banks and government institutions have REO/Asset Management companies who handle departments that field bids and offers, oversee upkeep, and handle sales. Most REO properties are listed with local MLS(Multiple Listing Services by REALTORS for marketing properties.) Bank properties are typically in need of repair and/or maintenance and the cost of these items is the responsibility of the mortgage servicer(bank or government agency.)

What Effect Will REO Have on Housing Recovery?…The nation’s largest banks and mortgage holders currently own over 872,000 homes which were repossessed through foreclosure or other means. That is nearly 2x the amount foreclosed on in 2007, when the financial crisis began. Unfortunately, that may not be the worst news because the same lenders are ready to repossess over 1,000,000 more homes according to RealtyTrac reports. The huge number of currently banked owned foreclosures and the large pending amount are causing economist to fear a double dip in the real estate market. According to Treep, a leading real estate research firm, will force the lender-owned homes to sell for deep discounts over the next 2 years and at a cost of almost $40 billion in losses. The opinion of REALTORS is that lenders are overwhelmed with the huge inventory which many times the homes are outdated, often overpriced by 10% or more and lenders take to long to accept or reject the offer. The largest problem is it takes over 400 days to foreclose and on average 176 days to sell.

My personal opinion is we are a long way from a housing recovery being done and it will continue to be a buyers market for some time to come. Marion County has some of the best prices in the state. Many can buy a home for less than the cost to rent in the area. Want to learn more or have questions, please call, text, chat or email me.

“Until Next Time”

[1] William Roark (2006), Concise Encyclopedia of Real Estate Business Terms ISBN 0-7890-2341-5

Source; “As Lenders Hold Homes in Foreclosure, Sales Are Hurt, New York Times May 23,2011

Freddie Mac Summer Special Deal

GREAT NEWS for Buyers and Sellers!

Freddie Mac is offering a “SUMMER SALES PROMOTION.” Upon qualified closing, HomeSteps will pay up to 3.5% of the purchase price of your home to cover certain closing costs. For instance, if your purchase price is $125,000, and your closing costs are $4,250, HomeSteps will only pay $4,250, an amount equal to 3.4% of your purchase price. Of course, not all homes or borrowers will qualify and the incentive is ONLY good to owner-occupants. You can visit, http://www.homesteps.com/smartbuy for all details.

BUT WAIT? There is more to this sweet deal!

Homesteps SmartBuy Program is also offering a 2 year HomeProtect Home Warranty and HomeProtect Appliance Discount The HomeProtect Home Warranty and HomeProtect Appliance Discount are available only to Participants who purchase and close on a qualifying HomeSteps home during the Program. The HomeProtect Home Warranty begins upon your qualifying home purchase closing date and continues for two years from that date. The HomeProtect Home Warranty has further restrictions and exceptions. Please see the HomeProtect® Home Warranty Terms and Conditions for all of the details. The HomeProtect Appliance Discount provides savings up to 30% savings on new appliances.

HOMES FOR SALE by Freddie Mac?

Where are they? In just about every location across the United States and Puerto Rico

How do you get more information? Contact your REALTOR® or better yet, if you do not have one, please contact ME! Or, you can visit, http://www.homesteps.com/featuresearch.html, and search any state, county or zip code for homes available in the program.


The offer is only good May 16, 2011 – July 31, 2011 with escrow closed on or before September 30, 2011. Now is a great time buy with low home prices, super low interest rates, and this new program could get you into a new/reseller home with little to no money down.

“Until Next Time.”