Why are there so many REO properties lately?
A The high volume of REO sales is a result of the high volume of foreclosure sales in recent years, as well as the nature of foreclosure sales. When a property is foreclosed upon, the mortgage lender often acquires title to the property at the foreclosure sale, although it’s possible that someone else acquires title. More specifically, when an owner fails to make mortgage payments, the lender may commence the foreclosure process to sell the property to satisfy the defaulting borrower’s debt secured by that property. In California, foreclosure is commonly handled through a trustee’s sale (not court action) where the property is sold to the highest bidder at an auction open to the public. At the trustee’s sale, the foreclosing lender may make a credit bid in the amount of its unpaid debt plus foreclosure costs, but the trustee typically requires any other accepted bid to be paid in the form of cash or cash equivalent. Because of the onus of paying cash, rarely does anyone outbid the fore
