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Monday, February 20, 2023

Fannie "Real Estate Owned" inventory increased in Q4; Expected to increase further in 2023

by Calculated Risk on 2/20/2023 01:37:00 PM

Fannie reported results for Q4 2022. Here is some information on single-family Real Estate Owned (REOs). 

First, a note on the pandemic from Fannie:
"In response to the COVID-19 pandemic, a number of legislative and executive actions were taken by the federal government and state and local governments to assist affected borrowers and renters and to slow the spread of the pandemic, including actions that applied to the loans we guarantee. While most of these actions are no longer in effect, the COVID-19 national emergency remains in place. In January 2023, the Administration announced it intends to extend the COVID-19 national emergency to May 11, 2023, and end the emergency on that date. We continue to offer forbearance relief and other home retention solutions to borrowers affected by the COVID-19 pandemic ..."
 emphasis added
One of those actions was a foreclosure moratorium that ended in mid-2021. Since then, foreclosures have increased slightly.

Fannie Mae reported the number of REOs increased to 8,779 at the end of Q4 2022, up 23% from 7,166 at the end of Q4 2021.  For Fannie, this is down 95% 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 Real Estate Owned (REO).

This is well below a normal level of REOs for Fannie, and REO levels will increase further in 2023, but there will not be a huge wave of foreclosures.