REO History Message Frequently Asked Questions

Q: How does Loan Prospector® determine that the stated subject property has been a real estate-owned (REO) property?
A: Loan Prospector will compare the stated subject property address against a list of investor real estate-owned properties available to Loan Prospector. If the stated subject property address is matched to an address on the REO list, a message will be returned.

Q: What is an investor real estate-owned property?
A: Real estate-owned (REO) is property acquired through foreclosure or deed-in-lieu of foreclosure. The REO referenced in the message is property acquired by a secondary market investor for the investor’s REO portfolio and is available for sale.

Q: What is the source of the REO data?
A: The REO data is a limited list of REO properties available for sale by investors, including Freddie Mac, Fannie Mae, HUD, and other investors. The REO list is not comprehensive.

Q: What does it mean if Loan Prospector does not return a REO History Message?
A: The REO data used in Loan Prospector is not comprehensive. If no message is returned, then the stated subject property address does not match an address in the REO data. It could however, have been in an investor REO portfolio, but that data is not accessible by Loan Prospector. It could also mean that the subject property address was not valid and the “address not found” message was returned. Although no action is required, we suggest that you verify that the address exists and is entered correctly. In some cases, such as new construction, the “address not found” message will be returned because the address is not yet in the US Postal Service database, and Loan Prospector cannot verify it exists.

Q: Is a loan still eligible for purchase by Freddie Mac if it receives a REO History Message?
A: Yes. The presence of the message will not impact the eligibility of the loan for purchase by Freddie Mac.

Q: Will the REO History Message be available for all transactions?
A: Yes. The message will be available for 1- to 4-unit properties on all conventional conforming, FHA, VA, and jumbo loans.

Q: What should I do if I receive a REO History Message?
A: Although no action is required when a REO History Message is returned, we suggest you review the appraisal closely to ensure the valuation is accurate and supported.

Q: Will the risk class be impacted if a loan receives a REO History Message?
A: No. The risk class on loans receiving a REO History Message will not be affected.

Q: Will loans that receive a REO History Message be subject to more scrutiny or review through Freddie Mac’s quality control process?
A: No. Freddie Mac’s process for selecting loans for quality control review will not change.