REO

It's no secret that the volume of distressed residential properties is weighing heavy on U.S. housing markets and prolonging any meaningful recovery. Of even greater concern is the industry's growing backlog of homes that need to be liquidated and resold but have yet to make their way to the market. Standard & Poor's has just released a new report in which it estimates that the principal balance of this shadow inventory now stands at $460 billion and will take the industry about 41 months to clear.

Last week, GMAC Mortgage called for a halt on foreclosures and REO sales in 23 states that may have been impacted by an internal procedural error. The incident could give cause for homeowners to file lawsuits against the lender, bondholders could be impacted, and the problem could reach beyond just GMAC since it also services mortgages for other firms, including the GSEs. A number of analysts have since weighed in on GMAC's foreclosure snafu. Attorneys general in several states are also launching their own investigations.

According to the Warren Group, a Boston-based provider of real estate data in New England, foreclosure petitions in Massachusetts reached its highest number in more than a year, jumping to 2,713 in August-a 13.23 percent increase from a year ago, according to the Boston-based research firm the Warren Group. More than 1,200 foreclosure deeds were recorded in August, an increase for the eighth straight month.

With the foreclosure crisis still raging, the nation's largest mortgage financier has amassed a hefty portfolio of repossessed homes. Fannie Mae took back 68,838 foreclosed properties in the second quarter alone. In the first quarter of this year, the company added 61,929 new REOs to its inventory. In an effort to increase sales of its foreclosed inventory and get these properties off its books, Fannie Mae said Thursday that it is offering additional incentives to both buyers and sellers of its REO homes.

Sales figures for previously owned homes rose in August following a big correction in July, according to data released by the National Association of Realtors (NAR) Thursday. The trade group's existing-home sales report showed a 7.6 percent increase in transactions during the month, bumping the annualized sales pace to 4.13 million homes and reducing for-sale inventory to an 11.6-months supply. The sales share of distressed homes rose to 34 percent last month. Analysts say the results are in line with expectations but disappointing, nonetheless.

Fannie Mae announced Monday that more than 29,000 owner occupants have purchased Fannie-owned REO homes over the last year through the GSE's First Look initiative. Fannie Mae also worked with nearly 800 public entities under HUD's Neighborhood Stabilization Program, enabling state and local governments and nonprofit groups to purchase nearly 5,000 foreclosure properties from the GSE's portfolio. Fannie says homebuyers who intend to occupy a home merit priority consideration in its REO sales process.

It was reported by Bloomberg Monday that Ally Financial's GMAC Mortgage had ordered its brokers and agents to halt foreclosures and REO sales on homeowners in 23 states. The company has denied the rumored foreclosure moratorium, calling it ""untrue speculation."" GMAC says an internal procedural error may cause some delays for foreclosures already in process, but all new foreclosure actions are ""continuing in the ordinary course of business with no interruption.""

That dreaded shadow inventory of homes that has captured headlines and gripped the industry and market analysts with angst is beginning to make its way out of the darkness, according to John Burns Real Estate Consulting. The firm says loan modifications were successful in delaying the inevitable foreclosure. But homes that have been stuck in that neverland of somewhere between delinquency and repossession are now winding their way through the foreclosure pipeline at a quicker pace and will soon come out the other end as a short sale or REO.

Arizona-based Sand Capital recently announced the company's acquisition of more than $100 million in distressed debt and REO properties. The company says the economic conditions present in the market for the last two years have created a once-in-a-quarter-century opportunity. Sand Capital has been acquiring commercial, residential, office, and industrial real estate assets since November 2008, has added 1.2 million square feet to its portfolio.

RES.NET has announced functionality enhancements to its landmark real estate management system, AMP. The platform was developed to improve the administrative and operational efficiencies of real estate professionals. Now, AMP boasts additional features that the company says will further streamline its use and enhance value, including a new ""buyers"" portal, a utilities section to manage and monitor recurring expenses, and a mobile application to expedite work in the field.