Friday, June 24, 2011

FHA sells record number of REO in May, Freddie Mac Serious Delinquency Rate declines

by Bill McBride on 6/24/2011 11:27:00 AM

A couple of updates ...

• FHA Sells record number of REO (Real Estate Owned) in May.

In Q1, Fannie and Freddie were foreclosing at record levels - and selling REO even faster - so their REO inventory actually declined. However, the FHA was apparently having REO inventory problems and the FHA's REO inventory increased in Q1.

It now appears the FHA REO problem has been solved. The FHA sold a record number of REO in April, and even more in May.

According to data from HUD (ht Keith Jurow), the FHA acquired 6,727 REO in May and sold a record 12,671 properties. The FHA REO inventory has declined from 69,9581 at the end of Q1 2011, to 60,587 at the end of May 2011. It appears REO at the F's will decline again in Q2.

1REO for March was revised up slightly.

• Freddie Mac reported that the Single-Family serious delinquency rate decreased to 3.53% in May from 3.57% in April. This is down from 4.06% in May 2010. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

The normal serious delinquency rate is under 1%, so this is still very high, but at least it is declining. (I'll post a graph when Fannie release their monthly delinquency report).

Note: These are loans that are "three monthly payments or more past due or in foreclosure".