Mortgage Field Services

Field Services: Scam or Legitimate Opportunity ?

REO Properties

Posted on | May 14, 2007 | No Comments

Your property inspection request forms may contain terms like REO, foreclosure, short sale, and other mortgage related terms. What do they mean?

  • Bank Owned: The bank has aquired title (ownership) to the property. The bank is the seller.
  • REO: or “Real Estate Owned” Can be read simply as “bank owned”.
  • Corporate Owned: Many times this is just another way to say “bank owned”.
  • Foreclosure: This is the process by which a lien holder aquires the property through court procedures. Each state operates a little differently, but this process can typically take several months once started and typically does not start until the owner is 60-90 days behind in payments.
  • Pre-Foreclosure: This is commonly referred to as the time during the foreclosure process but before the sheriff’s sale. In this time period you are still negotiating with the seller but the bank may have to be consulted in cases where a short sale is needed.
  • Short Sale: When a seller is in a distressed situation and the offer that is submitted does not cover the expenses to sell the home and pay off the lender, the seller may ask the bank to take a “short payoff” on the loan, meaning to accept less than what was owed. Banks will sometimes do this because they do not want to own homes. They want to make loans. Each circumstance is different and the bank is not required to accept any short payoff.
  • Sherriff’s Sale: In some states, the foreclosure process finishes with a “sherrif’s sale” of the home. The county sherriff holds an auction where all interested parties make a bid for the home. Most often a representative of the bank is the only bidder for the home.
  • Redemption Period:  A period of time in which the displaced person can re-acquire the property if they can get the cash or funding.  They can pay off the entity that bought it at the auction, most often the bank, and keep the home.

We did some REO work over the weekend, and our routine returned to normal a bit today.  It was kind of heavy on the insurance loss side, starting with four insurance inspections.  Those were followed by forty-eight occupancy inspections.  After getting an early start, I was home by two o’clock and was able to do a few chores around the house.

I guess I will be back on track for a while again.  I appreciate your patience, your phone calls and your emails.

I will be starting a new knowledge base or frequently asked questions application at TheRepReport™.  I will let you know how I intend to use it to help us all.

Category: Mortgage Field Services

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