market value vs. default loan

[Ti Hon]

Hello everyone,

I have read many posts .. if not all for the last month or so .. but still quite not comprehend why banks are listing REO properties at market value ( at least in State of California ) eventhough I have seen some of these properties had defaulted loan amount plus the added costs of junior liens and legal fees included .. still much less than the listing price.

In California, is it true if the bank sell the REO properties above the default loan values + legal costs and junior liens .. the excess amount will go back to the original mortgagor ?

If that is the case, I have very rarely see where banks list these REO " at costs ".

Please advise. Thanks.