Definition of real estate owned

real estate acquired by a lender through foreclosure in satisfaction of a debt and held in inventory until sold. A loan secured by foreclosed real estate is counted as a Nonperforming Loan in reporting loan quality in call reports to bank supervisory agencies. Foreclosed real estate normally is auctioned off through a bidding process. Normally, the lender bids what is owed, and no more. If there are no higher bids, the lender takes the property and it becomes real estate owned. Also called other real estate owned (OREO).