Only half of the previously foreclosed homes owned by Fannie Mae are either on the market or being prepared for sale. The remaining properties are currently locked away in some step of the foreclosure system.

The National Association of Realtors said in its existing home sales report Wednesday that its officials were pressuring government agencies to release more of their REO in markets short of inventory.

Many market participants long claimed the government – including Fannie, Freddie Mac and the Department of Housing and Urban Development – are deliberately holding these homes off the market in order to get more for them when home prices recover.

Fannie disclosed for the first time this year where these properties are in the lengthy and complicated REO process. In its second quarter financial filing, the government-sponsored enterprise said 23% of its more than 109,000 repossessed homes are currently available for sale.

That’s down from 28% at the end of last year.

An offer has been accepted on another 19%, and 11% have an appraisal pending, Fannie said.

But 47% of its inventory is unable to be marketed.

Roughly 14% of Fannie’s entire REO inventory is redemption status, meaning the time frame borrowers and second-lien holders can redeem the property under various state laws. The timelines vary and have come under much change across the country. In Michigan, for example, lawmakers passed a bill last year to extend the redemption period to as much as one year in some cases. The bill was referred back to a state committee in March.

Fannie said another 13% of its properties are still occupied by the borrower. The eviction process just hadn’t been completed.

Interestingly, 8% of its inventory – slightly less than 9,000 homes – are being rented as part of its piloted Tenant in Place or Deed for Lease programs, where the home is rented back to the borrower.

Its other piloted program to sell roughly 2,500 homes to investors, who were approved in recent months to rent the properties out, will close at some point in the third quarter.

“The properties we own are either on the market or in the process of being brought to market. Fannie Mae’s goal is to sell HomePath properties at market competitive rates as quickly as we can so that neighborhoods stabilize and recover,” a Fannie spokesman said.

In its financial filing, Fannie showed it’s taking fewer losses on its REO sales. The GSE recovered an average 65% of the unpaid principal balance from REO sales in the second quarter, up from a low of 59% at the beginning of last year.

But even this metric varies widely across the country. It was able to recover an average 78% of the unpaid principal through REO sales in Texas but only 50% of the original mortgage balance in Nevada sales.

Home prices began to steadily improve in 2012, pushing profits up for the GSE. It signaled to investors that the major hurdle holding back REO sales isn’t its own management of the properties but of mortgage servicer difficulties, specifically at the five largest banks.

Fannie sold only 5,000 more REO than the 43,700 homes acquired in the second quarter.

“We continue to manage our REO inventory to minimize costs and maximize sales proceeds,” Fannie said in its filing. “However, as we are unable to market and sell a higher portion of our inventory, the pace at which we can dispose of our properties slows, resulting in higher foreclosed property expenses related to costs associated with ensuring that the property is vacant and costs of maintaining the property.”

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