Wednesday, May 13, 2020

Fannie and Freddie: REO inventory declined in Q1, Down 20% Year-over-year

by Calculated Risk on 5/13/2020 03:11:00 PM

Fannie and Freddie earlier reported results earlier this month for Q1 2020. Here is some information on Real Estate Owned (REOs).

Freddie Mac reported the number of REO declined to 4,168 at the end of Q1 2020, compared to 6,714 at the end of Q1 2019.

For Freddie, this is down 94% from the 74,897 peak number of REOs in Q3 2010.

Fannie Mae reported the number of REO declined to 16,289 at the end of Q1 2020 compared to 18,998 at the end of Q1 2019.

For Fannie, this is down 90% from the 166,787 peak number of REOs in Q3 2010.

Fannie and Freddie REO Click on graph for larger image.

Here is a graph of Fannie and Freddie Real Estate Owned (REO).

REO inventory decreased in Q1 2020, and combined inventory is down 20% year-over-year.

This is close to the normal level of REOs.

It takes a long time to go from delinquency to foreclosure to REO.  So any increase in REOs from COVID-19 won't happen for a long time. Since underwriting has been fairly solid over the last decade, I don't expect a huge increase in COVID-19 related REOs unless the health crisis goes on for a long period.