When a house becomes an REO, if there is a lien on the property does it get wiped out indefinitely?

Asked by Carmen Ashland, Illinois Tue Apr 15, 2008

Interested in a home that is an REO. When I looked it up it said there was a mortgage lien on it for $130,100. Can it be an REO and have a lien on it still? How would that apply to me if I bought it?

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Rick Sharga, , Irvine, CA
Tue Apr 15, 2008
Generally speaking, if a home is an REO, the lender with the primary mortgage has repossessed the property and wiped out all of the junior or secondary liens. Contact the REO asset manager at the bank, or the listing broker to get confirmation, but unless this is a really unusual case, it's most likely that the report you saw is just paperwork that needs to be updated.

Rick
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