Tag Archives: Home Sales

Freddie Mac has announced the launch of a nationwide winter sales promotion to move its inventory of foreclosed homes and put them back into the hands of responsible homeowners purchasing a primary residence. HomeSteps, the GSE's REO sales division, will pay selling agents a $1,000 bonus for offers received on Freddie Mac-owned homes in select locations. The offer is valid only on homes sold to owner-occupant buyers and runs through March 15, 2012. Freddie Mac held 59,596 single-family REO homes as of the end of September.

Freddie Mac says its REO homes sell for an average of 94 percent of market value. According to the GSE, because Freddie Mac-owned homes are well maintained and priced right for the local market, most sell close to full estimated market value. Freddie Mac sold more than 80,000 single-family REO homes in the first nine months of 2011, which the company says is a record. According to the GSE, it is selling more homes than it's taking in through foreclosure.

Estimates of the industry's shadow inventory vary widely, but one thing analysts do agree on is that the overhang is massive and will likely weigh on market dynamics for years to come. Measurements of soon-to-be repossessed and foreclosed homes that have yet to hit the market range from 1.6 million to 8.2 million. Capital Economics' assessment falls in the middle of that range, and the company's analysts say if anything, theirs is probably an underestimate. They put the industry's shadow inventory at 4.3 million homes.

The average 30-year fixed-rate mortgage came in at 3.99 percent this week, according to data released Thursday by Freddie Mac. It's the second time this year the rate has dropped below the 4.00 percent mark, and is the second lowest reading in the history of the GSE's survey. It averaged 3.94 percent for the week ending October 6, 2011. Freddie Mac described rate movement overall as ""changing little"" amid a mix of economic data reports, with most loan products up or down just 1 to 2 basis points.

Home prices rose 4 percent during the third quarter, according to the latest IAS360 index from Integrated Asset Services. The index also posted a 0.4 percent gain from the beginning of the year and a 0.6 percent gain from the third quarter of last year. ""I did a double-take when I saw the numbers,"" says Paul Sveen, CEO of Integrated Asset Services. He says the market is behaving like it's already hit bottom, but it's likely just the calm before the storm considering the large volume of distressed properties hidden in the shadows.

RE/MAX has deployed CoreLogic's HomeStandings technology, which is configured with a reporting component that the companies say can help agents quickly identify potentially profitable foreclosed properties that are eligible for resale. The HomeStandings report combines property, neighborhood, and market characteristics to provide a complete local understanding of a home's value, marketability, and rent potential. HomeStandings then generates a grade for each property, enabling RE/MAX agents to assess the overall purchase quality of a home.

In the second quarter of 2011, single-family home prices fell 5.9 percent on an annual basis, according to the latest national Fiserv Case-Shiller home price indexes released Wednesday. This continuation of the double-dip that started in 2010 is not the end, according to Fiserv. In fact, the company predicts prices will continue to fall into the coming year -- dropping another 3.6 percent by the first half of 2012. However, Fiserv does see a light at the end of the tunnel.

Abandoned and foreclosed homes can quickly become hotbeds for criminal activity. Empty houses are looted for copper and appliances, illegally inhabited by squatters, or commandeered for drug trafficking and prostitution. According to Realis Real Estate Software, such activity not only negatively impacts the neighborhood in which it occurs, but it prolongs the time it takes to sell the property. Lauren Roberts, founder of Realis and 25-year REO veteran, says one way to protect foreclosed homes from criminal infiltration is to put them into the hands of new buyers.

Effective solutions to revive the market will take time. Meanwhile, upholding the condition, value, and ultimately the marketability of REO properties, as well as protecting surrounding properties and minimizing REO portfolio losses will continue to pose a significant challenge for servicers and investors. Field service companies are critical partners in helping the mortgage industry address this challenge. Alan Jaffa and Kathy Cogan of Safeguard Properties offer up 10 field service approaches to protect the value of REOs.

Econohomes has launched a new website aimed at redefining the online experience for real estate investors and homebuyers as they shop for foreclosed REO homes. The company buys residential properties in volume at discounted prices from mortgage lenders and servicers. Its online inventory comprises REO homes in more than 40 states, including properties that have been renovated.