Will REOs Hamper a Housing Recovery?

The nation’s largest banks and mortgage lenders currently own more than 872,000 homes properties in which they repossessed from foreclosure, according to RealtyTrac. That is nearly twice the amount they repossessed in 2007, when the financial crisis began.

But the problem may get even worse: Banks are ready to repossess another 1 million homes in foreclosure, RealtyTrac reports.

The swelling number of lender-owned homes has economists concerned because higher inventories of distressed homes can depress overall home values. Economists say that it could take lenders three years to sell their foreclosed home inventory.

“It remains a heavy weight on the banking system,” says Mark Zandi, the chief economist of Moody’s Analytics.

Indeed, the high number of lender-owned homes stands to cost banks $40 billion in additional losses as they’re forced to sell these homes at sharp discounts over the next two years, according to Trepp, a real estate research firm.

Real estate professionals told The New York Times that lenders seem overwhelmed by the huge inventory of homes. They also say these lender-owned listings are often out of date and overpriced by as much as 10 percent, and that lenders take too long to accept an offer.

These homes also can sit in limbo for nearly two years. It can take 400 days just for lenders to foreclose on the home and then 176 days, on average, to sell it.

Source: “As Lenders Hold Homes in Foreclosure, Sales Are Hurt,” The New York Times (May 23, 2011)

About Ady Simion (Realtor and Public Notary)

Ady Simion was named in the Top 1% of all agents for NRT LLC a subsidiary of Realogy that operates a variety of real estate offices under brands such as Coldwell Banker, Sotheby's International Realty, Century 21, The Corcoran Group, and the technology-based brokerages ZipRealty and Climb Real Estate. NRT has 787 offices and 47,000 sales associates. Selling and buying property can be very stressful but with the right agent it can be profitable and a fun experience. Ady is also a Notary Public and being a people person he wants to help negotiate for his clients making their transactions as smooth as possible. Ady’s goals are simple: He wants to be the best source of information on the Los Angeles area Real Estate market, as he assists clients through each transaction with care and professionalism. He is proud of his large referral base of clients who have placed their trust in him over the years. Why him, when there are so many good people out there?!?! • Sellers will have their property exposed to the largest team of sales professionals in the world by far. Coldwell Banker Agents sale more homes than anyone else. • Buyers will have the opportunity to view more properties exclusively. • And most importantly when you hire him you get a whole team working for you not just “only one person”. Ady Simion started his Professional Career as an Insurance Agent, and then mastered the Mortgage Industry focusing on helping buyers and sellers achieve their life dreams. He now is an Agent with the Largest Residential Real Estate Company in the nation and the world, Coldwell Banker, at the Pasadena office which is the leader in the areas in which he specializes. After finishing College Ady has consistently been a Top Producer in every office/business he worked at. He speaks English, Romanian and Spanish. Real Estate is constantly changing and working with an agent that has been involved in the Real Estate buying/selling process most of his life is always beneficial for clients. Call, text or e-mail him or just stop by to say Hi and ask any real estate questions you may have.

Posted on May 23, 2011, in Uncategorized. Bookmark the permalink. Leave a comment.

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