Located in Burr Ridge, Illinois, Codilis & Associates delivers services spanning foreclosure, title, and real estate transactions. Codilis and Associates strives to resolve complex processes to meet the needs of mortgage banking industry clients. Among its areas of focus is real estate owned (REO) closings.
REOs involve property owned and operated by federally financed agencies or banks. The properties are typically sold to them after a foreclosure process occurs, and the property fails to sell at auction. Freddie Mac and Fannie Mae are two of the most prominent government-funded entities (GFE) that act as investors.
The closing process has several steps. First, the foreclosed home is sold to an independent third party (the home buyer). In Illinois, REOs have different requirements than residential transactions. For example, the Illinois Multi-Board Residential Real Estate Contract signs an investor’s contract.
The latter benefits the investor in three areas - title insurance level provided, property condition, and “return of earnest money.” The investor is not required to provide comprehensive insurance over liens, encroachment, and easement issues that may arise. Likewise, investors’ contracts typically do not guarantee the property’s condition, as the investor did not live in the residence before its sale.
