Freddie Mac sold fewer homes in the third quarter then they have earlier in the year. Freddie Mac being one half of the Lending Powerhouse Team, sold more than 25,300 repossessed homes in the third quarter, down 13.5% from the nearly 30,000 in the previous three months. It was also a 17% decline from the record-setting 31,600 sold in the first quarter. Freddie Mac also repossessed another 24,300 homes back into the inventory. At the end of the quarter, Freddie held 60,000+ REO on its books, which has been reduced ever so slightly — as new foreclosures are completed — from 75,000 one year ago.
If this pattern continues and the GSE reduces a net of 1,000 REO from its stock shelves and inventory lists during every quarter, it would still take 60 quarters to unload the entire stock. That is just shy of 15 years for all of you keeping score, and not to mention that with a severely constricted foreclosure pipeline due to recent servicing problems and new regulations. As things begin to open up, the market will be asked to take in even more REO sales just to maintain their current trends.
“This is Due to continued delays in the foreclosure process for single-family mortgages,” Freddie Reported. “We expect these delays will likely continue into 2012. However, we expect our REO inventory to remain at elevated levels.”
While all of this is going on, nonperforming assets continue to mount. Totaling 6.6% of its mortgage portfolio in the third quarter of 2011. That number has risen up by 3.2% from the previous quarter. The Obama Administration and the Federal Housing Finance Agency began asking market participants for bright ideas on selling these properties in large quantities and have even thought of possibly renting them to help manage the still accumulating problem holding back housing and as an extension the overall economy of 2011.
FHFA Acting Director Edward DeMarco reiterated thursday, that there is such a strategy that will not be implemented nationwide but on a local level.