Properties that a bank owns due to foreclosure are known as?

Properties that a bank owns due to foreclosure are commonly referred to as Real Estate Owned (REO) Properties. When a property goes into foreclosure, and the bank takes ownership after an unsuccessful auction or sale, it becomes part of the bank's inventory of assets. These properties are essentially the bank's real estate holdings and are categorized as such to distinguish them from properties that are still actively for sale by the previous owner.

The term "Real Estate Owned" specifically indicates that the bank has completed the foreclosure process and now holds the property outright, giving it full responsibility for the property's maintenance, sale, and disposition. This designation is important for understanding the status of the property in terms of real estate transactions and financing.

Other options like Short Sale Properties refer to properties sold for less than the amount owed on the mortgage before foreclosure occurs, and Bank Owned Properties can sometimes refer generally to properties the bank has. However, these terms do not specifically capture the legal and procedural nuances of properties that are owned outright by the bank following the foreclosure process. Distressed Assets typically denote properties that are under financial stress but do not specifically imply ownership by the bank. Thus, the designation of Real Estate Owned (REO) accurately reflects this specific scenario in real estate terminology.