Foreclosures and Bank Owned (REO) Properties

Foreclosures and Bank Owned (REO) Properties 

What Does Real Estate Owned - REO Mean?
Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most foreclosure auctions  equal the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale.

What Does Foreclosure - FCL Mean?
A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract.

In some cases, to avoid foreclosing on a home, creditors try to make adjustments to the repayment schedule to allow the homeowner to retain ownership. This situation is known as a special forbearance or mortgage modification.