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Saturday, August 06, 2011

Fannie Mae sells record number of REO in Q2

by Calculated Risk on 8/06/2011 10:54:00 PM

Last week the FHA reported a record number of Real Estate Owned (REO) sales in June, and a sharp decline in end-of-quarter REO inventory.

Yesterday Fannie Mae also reported a record number of REO sales in Q2, and a decline in REO inventory. In Q2, Fannie Mae acquired 53,697 properties, and sold 71,202. Fannie's REO inventory fell to 135,719 from 153,224 at the end of Q1.

Here is a graph of Fannie Mae REO acquisitions (completed foreclosure or deed-in-lieu) and dispositions (sales) (ht Tom Lawler).

Note the slowdown in REO acquisitions in Q4 2010, and the increase in sales.

Since sales are higher than acquisitions, REO inventory is falling. However there are many properties delayed in the foreclosure process, and acquisitions will pick up later this year (or when the mortgage servicer settlement is reached).
FHA REO Inventory
From Fannie:

The continued weak economy, as well as high unemployment rates, continue to result in a high level of mortgage loans that transition from delinquent to REO status, either through foreclosure or deed-in-lieu of foreclosure, which has resulted in a higher inventory of REO properties as of June 30, 2011 compared with June 30, 2010. Our foreclosure rates remain high; however, foreclosure levels were lower than what they otherwise would have been during the first half of 2011 due to delays in the processing of foreclosures caused by continuing foreclosure process issues, changes in state foreclosure laws, and new court rules and proceedings.
Freddie Mac will report next week, but clearly overall REO inventory is falling (I'll have more on this soon).

• A long Summary for Week ending August 5th
Schedule for Week of August 7th