Contrary to conventional wisdom, as the nation moves through an extended housing  downturn, a number of credit unions have found themselves faced with significant amounts of REO.

REO represents real property the credit union has taken over after members lost the ability to pay make their mortgage payments or, in a smaller number of cases, walked away from their mortgage notes.

Historically, credit unions have generally not held much foreclosed real estate, industry experts say, because their mortgage underwriting has usually been more conservative than that of the mortgage banking industry at large and because they have often been more willing to renegotiate or refinance the terms of loans on their books.