An REO is a general term for a Bank owned foreclosure home that have been repossessed due to the previous home owner's default on their bank-sponsored home mortgage loan. When a homeowner defaults, the lending bank will have to repossess the home and sell it in order to retrieve the remaining debt left on the loan. Attending bank repossessed home sales such as these can be a great opportunity for home buyers and investors, since so many bank owned foreclosures are sold for huge discounts through foreclosure sales. Since a lending bank will only need to sell a bank owned home for a portion of the full loan amount provided to the homeowner, and not its full amount, they can consequently sell the foreclosure home for less than its actual value.