Fannie and Freddie can’t get REO to market fast enough
The market is ravenous for more REO-to-rental properties, but the inventory is battling to keep pace.
According to the latest report from the Federal Housing Finance Agency, REO inventory increased slightly in the fourth quarter as property acquisitions outpaced dispositions for the second consecutive quarter.
The overall number of property acquisitions dropped 13% while dispositions lowered 7% during the quarter.
Along with that, completed third-party sales and foreclosure sales continued a downward trend with a 15% decrease in the fourth quarter and foreclosure starts down 3%.
But this comes with news of the market continuing to heal.
The FHFA also noted that Fannie Mae and Freddie Mac completed more than 3.1 million foreclosure prevention actions since the start of conservatorship in 2008, helping more than 2.5 million borrowers stay in their homes.
Meanwhile, the inventory of REO homes steadily declined year-over-year since 2010.
For two months straight, acquisitions outpaced dispositions, with 49,149 acquisitions and 46,673 dispositions in the fourth quarter of 2013 and 56,794 acquisitions and 50,277 dispositions in the third quarter of 2013.
The last time acquisitions were greater than dispositions was in 2010 when the numbers, granted, were much larger.
Lynn Effinger, noted in a HousingWire blog, “Many note that with so much government intervention over the past several years with programs such as foreclosure moratoria, HAMP, HAFA, and others purportedly created to help struggling homeowners avoid foreclosure, the for sale REO market began drying up in late 2009.”