Fannie and Freddie Restart REO Sales
Fannie Mae and Freddie Mac have instructed their selling agents to move forward with transactions involving foreclosed properties in cases where sales were suspended due to potential problems with the legal paperwork. The GSEs were forced to temporarily halt the sale of certain properties when news surfaced that some of the nation’s largest servicers had been employing so-called robo-signers. Now that case reviews have uncovered no evidence of improper foreclosures, Fannie and Freddie are moving to proceed with REO sales.
Government Study Finds Banks Rarely Walk Away from Foreclosures
The Government Accountability Office just completed a study of what is called “bank walkaways” – when a lender initiates foreclosure but then doesn’t complete the process because the cost outweighs expected proceeds from the property’s sale. Officials argue the practice intensifies market deterioration and complicates stabilization efforts. But the agency found that abandoned foreclosures are rare – representing less than 1 percent of vacant homes between January 2008 and March 2010 – but concentrated in specific areas of the country.
California Forclosure Inventory Declines
In California, pre-foreclosure inventories dropped 11.8 percent in October from the prior month, largely thanks to a 16.8 percent drop in notice of default filings. Foreclosure suspensions led to a 29.9 percent decline in foreclosures that turned into REOs, and a 26.4 percent decline in those sold to third parties at auction. Despite the significant decline in new bank-owned properties, ForeclosureRadar says REO inventories actually rose, as REO resales continued to slow.
US Home Prices Decline
Home prices in the United States have declined for two months in a row, according to CoreLogic’s market index, after rising for the first seven months of the year. The latest home price index shows that national home prices, including distressed sales, declined 2.79 percent in September 2010 when compared to September 2009. That follows a drop of 1.08 percent in August 2010 from a year earlier.