Louisville REO (Real Estate Owned by a lender) houses have been a substantial part of the real estate conversation for some time. Whether or not we ever need to delve into an REO transaction ourselves, well-informed local homeowners are familiar with some of the basic terms that come up when REOs are discussed:
- Arrears: a home that is delinquent on payments – being there is red flags a possible future foreclosure.
- Decree (short for decree of foreclosure): the ruling that declares a property should be sold to pay its mortgage.
- Default property: a home behind in payments to a mortgager. May describe a property in (or close to going into) actual foreclosure proceedings.
- Power of Sale: a legal decree giving the mortgager or lien holder the right to advertise a home sale in order to bring the mortgage up to date.
- Quit claim deed: a declaration turning all rights to a property back to the lending bank or mortgager.
There is a wealth of information (trustworthy and not really) online about what should happen in a REO or foreclosure situation. Sometimes a short sale can be the most desirable solution, but before that can happen, decisions by both homeowner and lender have to be made. I always advise homeowners to seek legal and financial counsel before committing to either direction. If you should fall behind in your own mortgage payments, a good understanding of your options is the first step toward bending the situation in a positive direction.
I am available to meet privately to discuss sales pricing in our area — and where a sale is feasible, I’m here to help you make it happen!