Freddie Mac sells record number of REO in 1Q
Freddie Mac sold roughly 31,000 previously foreclosed and repossessed homes in the first quarter, a new record for the company as both government-sponsored enterprises shed inventory from the end of last year. Combined, both Fannie Mae and Freddie hold 218,000 REO properties as of the end of the first quarter, down from roughly 234,000 at the end of 2010, according to their filings. In the first quarter of 2011, Freddie holds roughly 65,000, compared to its larger sibling Fannie, which holds 153,000 REO in its inventory. While both GSEs made progress in cutting down this portion of the nation's inventory of foreclosed homes, which continues to drag down home prices, inventory has elevated since one year ago. Both Fannie and Freddie held 163,000 properties in the first quarter of 2010, almost what Fannie holds currently by itself. Repossessions at Freddie increased by nearly 1,000 in the first quarter, and the holding period for these homes averaged 191 days before being resold. This varies significantly from state to state, especially as servicers restart foreclosure processes in different areas of the country. Servicers paused the process late last year to correct procedural problems. "We expect the pace of our REO acquisitions to increase in the remainder of 2011, in part due to the resumption of foreclosure activity by servicers, as well as the transition of many seriously delinquent loans to REO," Freddie said in its financial supplement. Write to Jon Prior. Follow him on Twitter @JonAPrior.