Bank-Owned Property


DEFINITION of 'Bank-Owned Property'

Properties that are taken into a bank's inventory, after a foreclosure sale. Bank-owned property is aquired by a financial institution when a homeowner does not make their mortgage payments. These properties then sell at a discounted price, much lower than current home prices.

Also referred to as real estate owned property.

BREAKING DOWN 'Bank-Owned Property'

This type of property is taken back by lenders during foreclosure. Lenders and banks with the highest bid in a foreclosure gain the rights to obtain the property. Bank-owned properties tend to have low interest rates and low down payments. They can be found through the online service RealtyTrac, or directly through lenders. Large national lending institutions have departments called loss mitigation departments, that sell these properties.

  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  3. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  4. Involuntary Foreclosure

    When a borrower defaults on a home mortgage loan and the lender ...
  5. Underwater Mortgage

    A home purchase loan with a higher balance than the free-market ...
  6. Non-REO Foreclosure

    A real estate property that has been foreclosed successfully. ...
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  1. Do FHA loans have prepayment penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not ... Read Full Answer >>
  2. Can FHA loans be refinanced?

    Federal Housing Administration (FHA) loans can be refinanced in several ways. According to the U.S. Department of Housing ... Read Full Answer >>
  3. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  4. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  5. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>
  6. Are FHA loans assumable?

    Loans insured by the Federal Housing Administration (FHA) on or after Dec. 15, 1989, are assumable by qualifying borrowers. ... Read Full Answer >>

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