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.

RELATED TERMS
  1. Real Estate Short Sale

    Any sale of real estate that generates proceeds that are less ...
  2. Foreclosure Filing

    The initial legal process of selling a mortgaged property that ...
  3. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  4. Personal Property

    A type of property which, in its most general definition, can ...
  5. Pre-Foreclosure

    The status of a property which is in the early stages of being ...
  6. Property Management

    The administration of residential, commercial and/or industrial ...
Related Articles
  1. Managing Wealth

    Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.
  2. Investing

    5 Ways To Buy A Foreclosed Home

    There is no shortage of foreclosure properties. Find out how you can buy one for yourself.
  3. Investing

    The Guide to Investing in REO Properties

    Real estate owned properties present a unique investment opportunity but there are some specific challenges to be aware of before diving in.
  4. Investing

    Helping Clients Navigate Short Sales And Foreclosures

    Both buyers and sellers can benefit from a real estate professional experienced in dealing with short sales and foreclosures.
  5. Investing

    The 6 Phases Of A Foreclosure

    For many, foreclosure is still a real possibility. Make sure you're prepared and know the steps.
  6. Investing

    The Pitfalls Of Buying A Foreclosure House

    Find out if the house you're eyeing is really a good deal.
  7. Investing

    Don't Get Trapped in a Zombie Foreclosure

    Understand how foreclosures work and you can avoid the disastrous consequences of having a zombie foreclosure.
  8. Investing

    Your Property Tax Assessment: What Does It Mean?

    The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.
  9. Investing

    Buy Your Next Home From Uncle Sam

    As a result of rising foreclosures, some Americans will buy their next home from the U.S. government.
  10. Investing

    Purchasing A Short-Sale Property

    If you are looking for a good deal and have time to wait, a short-sale house may be for you.
RELATED FAQS
  1. What criteria does a property need to meet to be considered an 'investment grade' ...

    Learn what it takes for institutional investors to consider a property "investment grade," such as real estate investment ... Read Answer >>
  2. What's the difference between short sales and foreclosures?

    Understand the difference between a short sale and a foreclosure; both result in the loss of a home, either through a sale ... Read Answer >>
  3. What is foreclosure investing?

    Foreclosure investing involves the purchase of houses that are somewhere in the process of being confiscated by lenders due ... Read Answer >>
  4. What do states do with unclaimed property?

    Understand what unclaimed property is and what types of property can be considered abandoned or unclaimed. Learn what states ... Read Answer >>
Hot Definitions
  1. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  2. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  5. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  6. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
Trading Center