REO properties that are not rehabilitated spend an average 222 days on the market, but when the work is put in to upgrade these properties, they are sold roughly five months sooner, according to an independent study done by Field Asset Services. FAS is a property preservation company that works on 120,000 active properties at any given time. It tracked 17,252 properties in 13 states from January to July 2010. According to the study, rehabbed REO spent just 69 days on the market before being sold, a 68% reduction from those that weren’t repaired. And the number is growing. In the initial report FAS released in February, rehabbed properties spent 54% fewer days on the market. The Department of Housing and Urban Development recognizes the need to rehab these properties. In September 2008, the federal agency began granting money through its Neighborhood Stabilization Program. Among the possible uses for the money, state and local governments and nonprofit companies could purchase vacant REO from the banks, and repair them for resale. HUD has committed $7 billion in grants through three rounds of NSP funding. And foreclosures are still going up. RealtyTrac reported Thursday that 2010 foreclosure numbers were a new record, and 2011 should be worse. Write to Jon Prior. Follow him on Twitter: @JonAPrior