Property is being sold subject to 24 CFR 206.125. A new type of REO.
There is a new type of REO (Lender Owned ) property starting to hit the market. You may have seen this statement in the remarks section when looking for homes on the Internet. “This property is being sold subject to 24 CFR 206.125”. This identifies the property as an REO that is being marketed after it had a Reverse Mortgage on it. Reverse mortgages are sometimes know as Home Equity Conversion Mortgages (HECM) . In many cases these were probably reverse mortgages taken out during the boom by someone over 62 and in many cases, not all, they are in better condition than some other REOs because they were transferred back to the lender due the death of the owner rather than as a result of a financial or fraudulent situation. They are becoming available because of the drop in in the value of homes since the peak of the market when some lenders were aggressively marketing reverser mortgages. The expectation at that time was that values would continue to increase.
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