Recent reports put the shadow inventory of foreclosures at near 6 Million units. Of those the Governments Service Enterprises Fannie Mae, Freddie Mac, HUD, and alike own approximately 48% of those foreclosures.
What I have seen in the past 30 days is alarming. Those houses are flooding on to the market at between 20-30% below the last sold comparable in the same neighborhood. They are not trashed beat up fixers. On the contrary if they are in poor condition these agencies are hiring contractors to put in new appliances, carpet, paint, and do many other repairs to meet minimum FHA standards.
It also appears that there may be other back room deals which have the banks that took bailout and TARP money. Bank of America was allowed to sell thousands of their non performing Countrywide loans to Fannie Mae and others. The non GSE lenders appear to have slowed their foreclosure processes and release of REO homes to a crawl. Do we think that this may have to do with the blow out the Government is now pushing their REO's to the head of the pack?
Is this happening in your town? Check your MLS and see how many GSE homes came on the market in the last 30 days and take a look at the asking prices.
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