REO” stands for “Real Estate Owned” properties. REO properties are known as bank owned residential property, bank REOs, house foreclosures, etc. “REO companies” are businesses that deal exclusively with these investments. Foreclosure has been all over America for the past couple of years.

This phenomenon is expected to continue unabated for the next 2-3 years or longer. As a result, foreclosure property investment has become an industry unto itself.

There are several homes in various stages of foreclosure. As a result, companies that are completely dedicated to the acquisition and resale of REO & bank owned residential property have been springing up all around the United States.

They are called “REO companies” or “REO Asset Management Companies”. As foreclosure properties continue to pull up headlines, a number of investors and real estate professionals start to approach banks and lenders for the lists of bank REOs.

The list of REO properties provided by the bank or lending companies include the selling prices that will be allowed for those homes. Buying foreclosed properties used to be an informal process done on a bank-by-bank, house-by-house basis, but it soon changes when foreclosures began to sweep across the country.

Banks and lending companies are being flooded with foreclosure properties weekly. They need to find ways on how to get rid of these properties at the earliest time to avoid further losses in keeping the properties. This opportunity was seen by business people, thus leading the way to the birth of specialized companies.

Several companies consider themselves as REO Asset Management Companies but most of them do not make money in selling foreclosed properties. Most of them do not have the experience, fund, management relations to banks, network of realtors and others. Only those with the above skills become profitable in investing in REO properties.