The past few weeks of acquisitions and deals among REO asset managers shows more bets are being made that a long-awaited supply of these properties may finally be hitting the market.

At the end of June, Homeland Security Capital Corp. a government contractor for a variety of work including disaster relief, moved into the space by acquiring Default Servicing LLC, the former REO manager of the Law Offices of David J. Stern, which ceased foreclosure work in March. A week later, Stewart Lender Services acquired PMH Financial, which manages more than $2.5 billion in properties.

First American Financial Corp. (FAF: 15.07 +0.67%) is in the process of finalizing the development of an REO asset management firm based in Dallas that would replace the one spun off in the CoreLogic (CLGX: 14.55 +0.55%) separation last year.

Then, on Monday,  Default Resource's REO management branch, Executive Asset Management, signed a deal with Georgia-based United Bank. EAM will handle the entire REO process for the bank, which has approval from the Federal Deposit Insurance Corp. to acquire failed bank assets.

Default Resource brought in James Zeldin as the executive vice president. He's spent 20 years in the space and had a hand in setting up REO shops within Fidelity, now Lender Processing Services (LPS: 16.77 +1.33%) and the Ocwen Financial Corp.'s (OCN: 13.81 +0.44%) REO vendor Altisource.

"I think we're at a point now where servicers are struggling with identifying and training talented individuals to support loss-mitigation initiatives. But I think you'll get the inventory break over the next 12 to 18 months from these same investors and servicers," Zeldin said in an interview with HousingWire Tuesday. "They are now trying to retrain and develop their REO solutions suites and engage or begin to engage asset management companies who can scale to the size they need."

Stewart Lender CEO Jason Nadeau said the REO space came alive in the past year with companies looking to take advantage of the inventory of properties.

"We did our deal to have a much larger operational capability and the market footprint in the REO management business," Nadeau said.

According to RealtyTrac, recent foreclosure delays pushed up to 1 million filings that should have occurred this year into 2012 and beyond. And LPS data show that for every REO property sold, another 50 come in behind it onto the bank or government-sponsored enterprise balance sheet.

This, Zeldin said, is putting more pressure on banks to finally unload more inventory.

"We're increasing staff to get ready for that," Zeldin said. "I would absolutely expect an increase in inventory over the next 12 to 18 months. I'm personally expecting that a lot faster. I believe we're going to see macro forces pushing these institutions to do more REO liquidation."

Still, pessimism persists from those who've been hearing such calls for some time. Tom Moon, REO broker and owner of Pacific Moon Real Estate in California, said he remains doubtful.

"I think it's a continuation of the same hopefulness we have been hearing for years," Moon said. "I don’t think anyone has a private red telephone line to the 'source.' "

Still, there are signs the largest holders of these properties are putting more priority on unloading.

Freddie Mac sold a record number of REO in the first quarter, roughly 31,000 properties. And combined with Fannie Mae, the two mortgage giants held 218,000 REO as of the end of the first quarter. But that was pared down from 234,000 at the end of 2010. Bank of America (BAC: 7.2115 -1.21%) currently holds $17.9 billion in nonperforming loans or foreclosed properties, which dropped 3.3% from the previous quarter.

Eugenio Garrote, the REO director for the Miami-based real estate firm Best Beach, said his market in Southeast Florida needs to get these properties sold.

"The demand is there. We routinely get multiple offers from owner-occupants and investors," Garrote said, echoing pleadings from these brokers in the hardest hit states that have attracted investor attention. "We need the inventory of REO to be released from the courts' and banks' shadow inventory at a rate to keep the economy balanced. I'm not advocating to fully flood the market all at once, but right now, Southeast Florida is a mess."

Servicers are starting to revive the foreclosure process after the self-imposed moratoriums last fall. BofA Chief Financial Officer Bruce Thompson said this is especially true in nonjudicial states. For Zeldin, the REO wave will come in a matter of time, but the answer will not come solely from the banks, rather Fannie Mae and Freddie Mac.

"REO is one of the few things government has complete control over, and everyone's looking to Fannie and Freddie for guidance," Zeldin said. "The question becomes: When's the inflow?"

Write to Jon Prior.

Follow him on Twitter @JonAPrior.