The amount of REO inventory held by lenders is expected to peak in August 2011 at 545,000 properties, according to analysts at Barclays Capital. In April, REO remained relatively flat, increasing 0.8% from March to 526,000. The influx was primarily due to an increase in REO from the government-sponsored enterprises (GSEs), according to BarCap. Analysts also reported that properties are taking roughly 23 months to move from foreclosure to REO. Servicers are showing signs of caution, not wanting to shock the fragile housing recovery with too much inventory, according to analysts. And foreclosure moratoriums are the first line of defense. Moratoriums announced by the major banks and GSEs are the latest example. Servicers are also easing on the rate of foreclosure. The inventory of foreclosed homes, not yet in REO, fell to 1.95m in April, a 2.6% decline from 2m. It’s the first drop since 2005. Analysts said the tide in default servicing has shifted. For the past year, fewer loans moved from current status into delinquency as programs like the Home Affordable Modification Program (HAMP) kept foreclosure numbers from climbing. Now, however, homes are moving from foreclosure into REO at a faster rate as delinquencies have peaked. Because of this, analysts said the foreclosure stock is likely to decline in the months ahead. Write to Jon Prior.

Most Popular Articles

Here's where the real housing affordability crisis exists

Some housing pundits report the demand for housing is strong, while these same pundits, on another day say that we are in a housing affordability crisis. Can the two narratives be accurate at the same time? If not, which is one is true? HousingWire Columnist Logan Mohtashami takes a deeper dive.

Feb 17, 2020 By

Latest Articles

Cost of renting continues to steadily rise

While rent prices are going up, the latest 3% year-over-year increase marks the slowest pace in 18 months, according to a new report from RentCafe.

Feb 19, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please