List of REO Departments

By Cynthia Clark

When real estate goes through foreclosure, the lender retains the property that is then managed under the Real Estate Owned (REO) department. The properties, known as REOs, are place for sale in order to recover losses on the defaulted loan. An REO does not guaranteed a deep discount. However, there is room for negotiation, since the longer lenders must hold a property, the more money they lose on that parcel of real estate.

Ocwen Financial Corporation is a leading business process outsourcing provider to the financial services industry, specializing in loan servicing, mortgage fulfillment and receivables management services," according to information for Ocwen's shareholders on its web site. Based in Florida, Ocwen is also a major nationwide mortgage holder when foreclosed properties require disposal in the form of resale through the REO department. Ocwen provides an on line database for searching commercial and residential properties. Some properties are sold by bids placed through the web site. Each property has the name and contact information for the individual assigned, should additional information or viewing be requested.

Bank of America has one of the largest REO departments with residential and commercial real estate from all areas of the country found on line. The website is easy to navigate, with many options for narrowing down the search. Information is minimal and limited to a couple of photos. The property description typically only consists of the address plus the number of bedrooms and bathrooms. Property size is not usually mentioned for residential properties. It is best to contact the local real estate agent assigned to the property. Full contact information is provided on the property's profile page.. Bank of America does offer financing to qualified buyers and properties.

The U.S. Department of Veterans Affairs:(VA) issues federally-guaranteed loans to active military and veterans. When homes go into foreclosure, the VA contracts with property management services rather than operating its own REO Department. As of August 2010, Equator Financial Solutions maintains a search-friendly on line database of VA homes. Web site visitors must create an account (free sign-up) in order to view additional property details.

In addition to managing properties for the Veteran's Administration, Equator Financial Solutions serves as the REO listing service for other lending institutions. Banks and mortgage companies are not in the property business, so managing the forecloses for resale is time-consuming and detracts resources from the core lending operation. Contracting with services such as Equator relieves the institution of additional burdens. The advantage to real estate shoppers is a larger number of properties for viewing from a single location.

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