REO stands for real estate owned property. These are purchased by a bank or a lender who has foreclosed on the original loan. Lenders buy these homes and properties when the bids received at the auction were not higher the the default amount of the loan. REOs can be purchased from many different places like mortgage companies, finance companies in addition to the banks. For more information go to http://www.investingwiththestars.net/season2 and learn more about strategies for real estate investing and education!