Freddie MAC dumps record #'s REO

Freddie Mac sold roughly 31,000 previously foreclosed and
repossessed homes in the first quarter, a new record for the
company as both government-sponsored enterprises shed inventory
from the end of last year. Combined, both Fannie Mae and Freddie
hold 218,000 REO properties as of the end of the first quarter,
down from roughly 234,000 at the end of 2010, according to their
filings. In the first quarter of 2011, Freddie holds roughly
65,000, compared to its larger sibling Fannie, which holds
153,000 REO in its inventory. While both GSEs made progress in
cutting down this portion of the nation's inventory of foreclosed
homes, which continues to drag down home prices, inventory has
elevated since one year ago. Both Fannie and Freddie held
163,000 properties in the first quarter of 2010, almost what
Fannie holds currently by itself. Repossessions at Freddie
increased by nearly 1,000 in the first quarter, and the holding
period for these homes averaged 191 days before being resold.
This varies significantly from state to state, especially as
servicers restart foreclosure processes in different areas of the
country. Servicers paused the process late last year to correct
procedural problems. "We expect the pace of our REO acquisitions
to increase in the remainder of 2011, in part due to the
resumption of foreclosure activity by servicers, as well as the
transition of many seriously delinquent loans to REO," Freddie
said in its financial supplement.