The Bank of New York Mellon does not directly sell real-estate-owned, or REO, properties to the general public. However, Fannie Mae and Freddie Mac, the two government-backed institutions that buy mortgages from lenders such as this bank, sell bank-owned REO properties, states Fannie Mae.
An REO property is a home for which the borrowers failed to meet their mortgage obligations and subsequently went into foreclosure. Once the home is in foreclosure, lenders such as the Bank of New York Mellon offer the home for sale at auction. If a third party does not buy the property at auction, the bank buys back the home, and the property is on the bank's books as a bank-owned REO property, according to RealtyTrac.