I keep seeing that term used in real estate news.
Here’s a news report noting that high foreclosure rates have not driven down home prices as much as would normally be expected:
Three out of four regions saw increasing levels of REO saturation but fought hard against the usual and often dramatic downward pressure on prices it brings. In fact, the regions saw higher REO saturation, the seasonal effects of winter, and an unsettled political environment (election year) but resisted these negatives effects surprisingly well. Price stability in this environment indicates the presence of positive forces, which could be the improving unemployment numbers, an increase in investor activity, and an increase in overall demand.
Each metro on the list held onto quarterly gains, but with just six of the Top 15 showing price growth of greater than 2 percent. However, the quarterly gains for this group averaged 2.4 percent against the 1.5 percent average quarterly gain posted for the Top 15 group last month.
Read more: http://www.upi.com/Business_News/Real-Estate/2012/03/06/Foreclosures-Dont-Faze-Top-15-Markets/9961331043257/#ixzz1oMvO7Cba
Wikipedia says: Real estate owned or REO is a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the beneficiary will legally repossess the property. This is commonly the case when the amount owed on the home is higher than the current market value of this foreclosure property, such as with a high loan-to-value mortgage following a real estate bubble. As soon as the beneficiary repossesses the property it is listed on their books as REO and categorized as an asset (non-performing asset).