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October 14, 2010

REO ALERT. As most of you know, Bank of America, PNC and many other large lenders and servicers are halting all foreclosures due to the “robo signing” problem. What you may not know is that they are also halting the sale of their REO properties. An REO property (a/k/a “OREO” or “Other Real Estate Owned”) is a property that a bank has taken back through foreclosure or by a deed-in-lieu of foreclosure. This applies to properties that are currently listed for sale AND PROPERTIES ALREADY UNDER CONTRACT FOR SALE. We have learned, for example, that PNC has suspended settlement on some REO properties that are under contract while they review the foreclosure proceedings. Not all banks are taking this action, of course, but if you represent a buyer who has signed a contract to buy a bank-owned property, then we suggest that you verify with the listing agent that the seller will proceed with settlement as per the contract.

Feel free to call us with any questions.

 

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