Seized properties that end up as unsold inventory after failed auctions are called "Real Estate Owned" or REO properties. These REO properties are usually owned by lenders, real estate insurers, or the government, which may seize property for recovering taxes and other unpaid dues.
Do you have additional questions regarding REO properties? Our real estate attorneys are here to assist you throughout the process and answer any questions you may have. Contact a real estate lawyer near you today.
Lenders with REO properties on their books need a variety of legal services and representation, as listed below:
The main reason that foreclosed properties end up in the REO list is because the list price (mortgage balance) is higher than the market value of the property. There may also be additional liens and other mortgages that scare off prospective buyers looking for a clear title. So the main job for an attorney providing REO services to lenders is to get a proper appraisal done to find out the exact value of the property and then clear up the title.
After this, the lawyer can help with negotiations for the sale price and terms with a buyer and draw up the deeds. Legal assistance may also be required if the foreclosed owner or other interested parties have filed a lawsuit to try to physically reclaim possession of the home. Since the property is now in the possession of the lender, they are responsible for its upkeep and required maintenance. If an unmaintained REO property causes damage or injury, the lender can be held liable for it.
Do you or does someone you know need legal information regarding REO properties? Our real estate lawyers are here to help. Contact a real estate attorney in your area today for more information.
Did you know?
Lenders can sell Bulk REOs for lower prices.
A lender may choose to dispose off REO properties in bulk to a single buyer or real estate investor.