REO Listings: Foreclosures explain Half of All Home Sales
More than three thousand real estate agents surveyed nationwide were asked what is really going on with today’s housing market – and, according to them, distressed home sales, including REO similarities, made up over 47 percent of the total market in September of this year, up from August. Inside Mortgage Finance, together with Campbell Surveys, polled the agents, who also revealed that REO sales were up severely month-to-month.
Those REO sales will continue to make up a large part of real estate activity as, despite recent controversies over how edges and mortgage lenders were handling foreclosures, a nationwide moratorium on them now seems impossible. On Wednesday, October 20th, Department of Housing and Urban Development Secretary Shaun Donovan said these foreclosure problems occurring at a few mortgage companies are not “systemic issues.”
“Where there have been mistakes made or errors, we will keep up those entities, those institutions accountable to stop those processes, review them, and fix them as quickly as possible,” commented Donovan.
White House Press Secretary Robert Gibbs also weighed in with the Obama administration’s view that a nationwide moratorium on foreclosures would be “dangerous” and will not be pursued.
“We have talked about, over the past week or so, the danger that we see in…halting the complete housing market and the danger that it would provide — or potentially provide writ large — and its effect on the economy,” said Gibbs.
Most experts agree that the overwhelming majority of homeowners currently in the foreclosure course of action are, in fact, in default and have been unable to pay their mortgages.
There are also simply too many REO homes in the pipeline to ignore. Three of the biggest edges, JPMorgan Chase, Wells Fargo and Bank of America, each reported they had more than $20 billion in single-family mortgages either already converted to REO similarities or in foreclosure.
JPMorgan Chase has the largest quantity of REO homes with $21.7 billion. It also has $43.4 billion in mortgages past due. Bank of America has $20.3 billion in REOs, and $54.6 billion in past-due mortgages.
And there are billions more in REO similarities out there with the smaller edges, such as Citibank with $6.3 billion in foreclosures and $19.2 billion in past-due mortgages.
With hundreds of billions of dollars worth of possible REO listings nevertheless to come, the need for qualified REO agents and professionals to manager those similarities will continue to build.