In addition to banks, private mortgage companies originate hundreds of thousands of mortgages each year. Some of the mortgage companies are fully owned bank subsidiaries, while others are companies formed solely for the purpose of originating mortgages. Just like banks, they have REO departments.
It might be a little tougher to find the mortgage companies, but with a little detective work it won't take long to locate the ones you want to contact. Keep in mind there are many local sales offices or origination offices that produce mortgages for a company. Many times there are licensed mortgage brokers arranging home loans. These local offices are not the ones with REO departments. Rather, the larger regional or home office is where the REO department is located. A simple inquiry can usually locate the mortgage company's REO office.
You can often locate a mortgage company's REO department by looking at the mortgage foreclosure complaints in your local courthouse. The legal document includes the name and address (and often the telephone number and fax number) of the REO office.
Mortgage companies work the same as banks: Their goal is to sell the foreclosed property as quickly as possible. They will gladly add your name to their investor's list. All you need to do is ask to be included.
Lenders are not required to provide a list of their REO properties. There is no statutory requirement that a list be prepared and made available to the public. Lenders routinely prepare lists and make them available for their real-estate agents and others involved in managing and selling the properties.
Some lenders use the Internet to market their owned properties. For example, Countrywide, one of the largest mortgage companies, lists their properties on their Web site. On the site the lender says, “A Countrywide owned property (lender-owned), also sometimes referred to as a REO (real estate owned) home or property is often a way to get a good deal on a home or an investment property.” The Web site address is
The following is a list of national and regional lenders that post their real-estate owned listings on their Web site. The list is not exhaustive but rather a starting place to locate properties:
Bank of America:
Beal Bank — Commercial Listings:
Beal Bank — Branch Banking & Trust (BB&T):
Downey Savings & Loan:
Fremont Investment & Loan:
GRP Financial Services Corporation:
Home Loan and Investment Bank:
IAS — Integrated Asset Services:
Ocwen Financial Corporation:
U.S. Home Mortgage:
Wilshire Credit Corporation:
1st National Bank of First Scotia:
Coast and Country:
Lexington State Bank:
Mortgage Lenders Network USA:
National Bank of Arizona:
New South Federal Savings Bank:
Texas State Bank:
Virginia Housing Development Authority (VHDA):
Each lender works differently, but they all have similar goals. They intend and desire to get the best price possible. They have no interest in dumping the properties they own cheaply. Once you make an offer to purchase a property, most lenders will present a counteroffer. Often the counteroffer a real-estate investor receives is higher than you would expect. This is the lender (and its employees) demonstrating to investors, shareholders, and auditors that it attempted to get the highest price possible for the property owned.
You should be more surprised to get an acceptance than a counteroffer from the lender's loss mitigation department when offering to buy the REO. Lenders generally take the position that they will negotiate hard for any property they own. They will tell you (and anyone else) that they want fair market value.
You should always plan to counter the lender's counteroffer. It is also typical for most lenders to add a condition to your offer, such as “subject to corporate approval within five days.” This is because your purchase offer and counteroffers must often be reviewed and approved by several individuals, other companies, or investors before final approval is accepted.