First-Time Home Buyer Q&A - Quicken Loans Zing BlogIn this post-2008-financial-meltdown world of ours, buying a home that the owner wasn’t able to pay for anymore has become a lot more common, and so have all of the different terms and options related to those sales: short saleforeclosuredeed in lieu and REO properties.

In this week’s First-Time Home Buyer Q&A Google Hangout, we talk about REO, or real estate-owned, properties – specifically how to buy one that is owned by the Department of Veterans Affairs (VA). But let’s take a step back first and look at what an REO home is.

What Does REO Mean?

REO refers to a home that the homeowner lost in foreclosure. If the lender who foreclosed on the home can’t sell the property at a foreclosure auction, then the lender takes over ownership of the home. The lender then tries to sell the real estate-owned property to minimize their losses.

Buying an REO home can be a good idea because they’re usually priced low because the lender wants a hassle-free process and hopes to create some competition between buyers. However, these types of homes often need repairs, and the lender usually won’t pay for any of the work because they don’t want to spend any more money than they already have on the home. So, you can get it for a lower price, but you might have to spend a lot of money fixing up the home.

Buying an REO Home

Because you’re dealing with an institution and a property that was taken in foreclosure, it can be more of a hassle to buy an REO home than one owned by an individual, and that’s what we cover in this first-time home buyer video segment. Someone was having trouble buying a home that was taken over by the VA and asked how to proceed. Mark Connors, lender liaison for the VA Loan Guaranty, says that if you’re having trouble, or just have questions when trying to purchase a VA REO property, you can contact him at Mark.Connors@VA.gov.

You can also watch the video here!




 

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This Post Has 4 Comments

  1. already live in a REO Property, which was first a reverse mortgage to my now deceased mom. The reverse mortgage was processed in 2007. My mom died in 20012. I was pre-qualified to purchase at short sell in 2013. I was denied due to problem with getting on title. Later on finding out that my sister was still on the deed and was forced by an attorney that represented the reverse mortgage to sign deed over to the bank. Or she would be responsible for the mortgage and stated that they will garnish her wages. My sister explained to the reverse mortgage rep, that she had no knowledge of her name being on the deed, for she had already sign a form from the reverse mortgage to take her name off of the deed. after being harassed by the bank’s rep., she felt forced to sign a ratification form to sign over the deed. ( in 2013) Which later was found to be fraudulent according to a law firm that was representing her case. Unfortunately my sister ignorantly file for bankruptcy during this investigation. She filed chapter 7 which of course put in the hands of the trustees. At this point the reverse mortgage rep. settled for 50,000 dollars. P.S. I’ve been living in this property for over 30 yrs. Which was bought and owned by my now deceased parents; until my mom decided to get a Reverse Mortgage. And just recently my son who lives with me is now paralyzed. How can I keep this property

    1. Thank you for your comment, Teace. I’m going to have a home loan expert reach out to you with an email. They’ll look at your situation and see what we can do.

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