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REO Escrow Process

What is REO Escrow?

REO or Real estate owned escrow transactions have a reputation of being notoriously complex, and they can be different from standard real estate escrow transactions in a lot of ways. First Priority Escrow realizes that these transactions require a watchful eye that adhere to strict guidelines in order to prevent potential mishaps and delay the closing.

To start the REO escrow process, both the homeowner and the mortgage lender or bank need to accept the Purchase and Sales Agreement. Once the bank has the agreements it can take weeks and even months to approve the transaction. Sometimes the bank refers to a selected panel to review the agreement and make a decision. Because a bank is involved, an REO escrow transaction has strict guidelines in place that must be followed:

  • Escrow opens when the seller uploads the contract into its online system.
  • Escrow instructions, commission orders and preliminary title will be sent to the escrow company.
  • Loan documents must be received at least one day before the buyer has an appointment to sign.
  • It typically takes 5 days after the buyer signs for escrow to receive the estimated HUD approval.
  • With this approval, the file is set to record once the lender’s funds are received.
  • Funds are typically distributed 1 to 3 days after recording.

Because of these complexities, the timeframe of a standard escrow will not apply with an REO escrow transaction. Count on weeks after the property buyer’s offer is accepted before the seller their required procedures. Even though there is no way to move the sellers actions faster, First Priority Escrow will help you manage your requirements in a timely manner to ensure the process is as smooth and quick as possible. Our escrow agents will proactively handle your transaction and resolve any problems that may arise to prevent delay.

The Real Estate industry continues to rise and the overall economy has shown great improvements but REO properties still make up a significant portion of inventory in many areas, and these transactions can be frustrating. Count on First Priority Escrow for the experience and management skills to make the process as easy and problem-free as possible.

First Priority Escrow will handle all aspects of your REO escrow transaction:

  • Acts as a neutral third party
  • Requests and processes title reports, funds and documents
  • Keeps all parties informed of the escrow progress
  • Works as a secure depository for escrow funds
  • Secures release conditions
  • Approvals reports and documents
  • Prorates dues, taxes and utilities
  • Manages funds disbursement
  • Prepares and sends the final settlement statement
  • Ensures all titles, reports, documents and funds close

While closing REO escrow can be complex, put your faith in the experienced employees at First Priority Escrow to do it right. We work hard to make sure that our clients have a streamlined escrow process to close as fast as possible.

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