What does the abbreviation REO indicate regarding a property?

The abbreviation REO stands for "Real Estate Owned," which refers specifically to properties that are owned by a bank or lender after they have gone through the foreclosure process. When a borrower is unable to make their mortgage payments and the property is foreclosed upon, the property is typically sold at auction. If the property does not sell, it becomes the possession of the lender, resulting in an REO status.

This designation signifies that the bank or mortgage company has taken ownership of the property and is now responsible for its management, maintenance, and eventual sale. The REO process often involves the bank attempting to recover some of its losses from the original loan by selling the property, typically at a discounted price compared to market value.

In contrast, the other options clarify different statuses of properties. A property listed for sale is not necessarily owned by a bank but could belong to an individual. A property owned by the original homeowner indicates that it has not gone through foreclosure, and a property held by a real estate agent refers to listings that are under active representation but do not specify ownership status.