Skip to main content

MORE EVIDENCE OF THE REO GLUT

According to Inman this morning,

"Fannie Mae and Freddie Mac boosted loan modifications by 76 percent in the last three months of 2008, but nearly doubled their inventories of real estate-owned properties over the course of the year as the companies eschewed short sales and seized properties faster than they could sell them."

Here is another new report that helps quantify how many properties are being held "bank-owned" following foreclosure. Among the findings:

  • The companies were saddled with real estate-owned (REO) inventory of 92,884 homes at year end, 2008 -- nearly twice the 48,123 properties on hand at the end of 2007.
  • During the last three months of 2008, loan modifications were approved for 23,777 loans owned or guaranteed by Fannie and Freddie, a 76 percent increase from the previous three months.
  • But over the course of the year, the mortgage giants repossessed about eight homes for every short sale they conducted.
  • Fannie and Freddie's loan servicers agreed to 16,718 short sales in 2008, while the companies repossessed 145,183 homes, their annual reports showed.
  • Although Fannie Mae was able to sell 64,843 repossessed homes in 2008, it acquired 94,652 through foreclosure, leaving it with REO inventory of 63,538 homes at year end -- an increase of 152 percent from the end of 2006.
  • Freddie Mac sold 35,579 homes in 2008, but repossessed 50,531. The company's REO inventory ballooned from 14,394 homes at the beginning of the year to 29,346 homes by year end -- a 334 percent increase from the end of 2006.
Sellers better think seriously about any reasonable offer that comes in this spring. I still think that these properties are going to start coming back on the market soon, in large numbers. When they do, I expect that prices will deflate and everyone is going to have to re-set expectations for market pricing once again.

Buyer should definitely continue to shop NOW for already attractive real estate values. I am seeing some pretty sweet (buyer) deals in the contracts I have been reviewing of late. But, to be sure, if you don't see something you like right now, all those REO properties out there are going to give you a whole lot more options....
Labels:

Comments

Post a Comment

Popular posts from this blog

FHA Loans and Condo Sales - Is Relief on the Way?

By all outward appearances, state government in Illinois has ground to a complete halt, with all eyes focused on the Governor's "problem" and all the related fal - der -rah. Its hardly business as usual in Springfield, but not everything has ground to a halt. Several new bills have been introduced this week. That is not to say that they will be of benefit to we the people. Nonetheless, the cogs and gears are turning, and we are hoping for the best. One such proposal comes from Rep. LaShawn Ford of Chicago's west side, who is himself a real estate broker and entrepreneur . He is the author of House Bill 155 , introduced & referred to the Rules Committee Wednesday. It seeks to address one of the most common problems I am seeing in condominium resale transactions these days; the tension between many Declarations of Condominium and FHA loan guidelines. Many Condo Declarations provide Associations with a "right of first refusal," which basically allows t
3 comments
Read more

PLM Title Shuttered

Title insurance is a critically important part of any real estate transaction; or at least it should be. The title company guaranties the "quality" of an owners interest in the property - that there aren't any (unknown) liens or defects. No buyer that I work for will purchase a property without it. Title insurance is only as good as the insurer. We want to know that the insurance company, like the Rock of Gibraltar , will always be there. We want to sleep easy at night, knowing that the client is protected. That said, it was a bit distressing to see that PLM Title Company shut its doors, without any forewarning last week. Worse still, this morning's news is that there is a criminal investigation underway - and that we do not yet know why. Old timers like me shudder with memories of the great Intercounty Title debacle five years ago. Here's to hoping that this one is nothing like that one. Set aside the problems involved trying to make a claim against a defun
6 comments
Read more

So.... about the blawg

Nov. 2022 Hello Dear Reader. I started blogging on this site 15 years ago.  Crazy right? May or may not Chicago's longest-running blog about real estate law. I think so, but who knows, Whether it is or isn't doesn't, of course, really matter.   Either way, it's been a blast.  But things change. We've pulled up the tent stakes here and are relocated on other platforms. Want to follow along? Join us on the mothership I'm also writing on LinkedIn Thanks for everything.
Post a Comment
Read more