What is the difference between foreclosure, short sale and bank owned?

Asked by M, Alexandria, VA Wed Apr 2, 2008

as far as buying such a property goes?

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3
Danilo Bogda…, Agent, Reston, VA
Wed Apr 2, 2008
The terms "foreclosure," "bank-owned property" and "REO" are used interchangeably these days.

Technically, "foreclosure" is a process, not an end result. It's the process the bank/lender goes through once the borrower fails to continue making payments on their mortgage. Eventually, the home is "foreclosed" on and the borrowers are evicted. (That's an "in a nutshell" explanation)

"Bank-owned property" and "REO" mean that the foreclosure process has been completed, the home went to auction and that the bank has bought it. The bank now owns it and when you see it, it's after the bank has chosen a listing broker/agent to help sell it and the property is "on the market."

Short-sales are a different ball of wax. Follow the link below to my post on what a short-sale is.
2 votes
BOA illegally foreclosure on my mom's house. We have a "RIGHTEOUS CASE" according to our Judge/Mediator but b/c my mom was in hospice and the likelygood that she would die before the trial date, I was forced to settle our case in mediation.

My question is who is liable for the taxes and HOA during the years of foreclosure and the two years when the bank owned the house?
Flag Mon Sep 25, 2017
Margaret Ama…, Agent, Sarasota, FL
Wed Jul 8, 2009
Very briefly the foreclosure process starts with the bank suing the borrower from which a lis pendens is entered into public record.
A shortsale is a payoff where the lender accepts less than the money owed. A short sale may happen while the foreclosure process is in motion.
Bank owned or REO just means that a property has gone through the legal foreclosure process and the property has been sold at auction. These days there really is no auction per se, the lender is represented at court to receive the property back. Since most properties are worth so much less than what is owed on it there are no bidders. An REO is owned free and clear by the bank.
1 vote
Joey Remondi…, Agent, Vienna, VA
Wed Apr 2, 2008
Short sale= An owner who is selling a home and will net less then what is owed on the property and the bank/lender will take the loss.

Foreclosure= The process by which a bank or lender takes a home back from an owner who has defaulted on the loan. (the property is usually offered on the court house steps for the price of the outstanding loan)

REO= Real Estate Owned, usually by the bank or lender and is on the market for sale through an agent or at action.
Web Reference:  http://www.blog.calljoey.com
1 vote
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