REO OR PROPERTY PRESERVATION?
An Excerpt From:
Property Preservation Winterization Guide, Reference, Tips And Techniques
The Property Preservation Industry has given very little differentiation between REO work and Property Preservation work. In fact, many contractors do not realize there is a difference and some of those that do know cannot tell you how it effects their business.
Two Types Of Foreclosed Properties
Basically, there are two types of foreclosed properties you will be working on.
1.P&P properties which is commonly called property preservation and
2.REO properties which practically everyone refers to as “REO.”
So what is the difference between the two? The primary difference between P&P and REO is in who owns the property.
The Foreclosure Timeline
P&P properties are somewhere in the foreclosure process which means the mortgagor still has some rights to the property and at the same time the lender is acting on their right to protect their investment. That is why you are there – to preserve and protect the property so that the lender can prevent, as much as possible, any deterioration in the value of the property due to neglect, vandalism and in the case of winterization, freeze damage.
You will often hear P&P properties referred to as “pre-sale” which means that the property has not yet been sold, auctioned or otherwise had its ownership transferred away from the mortgagor.
As soon as the property has had its ownership transferred away from the mortgagor, the property becomes “Real Estate Owned” or REO and post sale.
There are differences in how a property preservation contractor should proceed to perform services on an REO Property. This manual covers P&P Properties only.