Is a Deed In Lieu of Foreclosure Property Considered REO?

If a property was returned to the lender by a Deed In Lieu of Foreclosure, is it considered an REO?

BEST ANSWER Absolutely yes! In lieu of or not, when the bank forecloses, they own it. Buyers can then purchase these directly from the bank (I use www.repofinder.com) at a discount. Short sales are where it gets complicated ;)

- RF - Dec 14, 2012 at 12:32PM
1 Answer

Yes, it is considered an REO. REO stands for " **Real **Estate Owned" by a mortgage lender. Lenders become owners of properties when borrowers default on their mortgages. A "deed in lieu of foreclosure" occurs when a borrower agrees to deed the property to a lender to avoid foreclosure. So regardless of how the lender acquires the property, whether through foreclosure or by deed in lieu of foreclosure, the lender owns the property. REO is a mortgage industry acronym for the property that a lender owns that they have put on the market to sell in an effort to recoup the losses on their defaulted loans.