This is?a good news ? bad news post. The amount of government foreclosure inventory was cut about in half in 2011 but repossessions are expected to jump up in 2012 to pre-robo signing levels. Georgia remains in the top tier nationally for?distressed inventory, driven hard by Atlanta foreclosures and underwater homeowners.?The latest round of federal assistance isn?t expected to do much to stop the bleeding and the recent foreclosure bank settlement was nothing short of criminal, those lenders were really punished weren?t they?
Locally, the impact of distressed and foreclosure sales continue to hamper the Atlanta real estate market. However, there are micro markets that are stable and others headed that way. In fact, when you extract the influence of distressed properties, many areas are actually doing well. In these areas we see well presented, accurately priced homes getting plenty of attention for buyers. Atlanta home buyers are tired of foreclosures and home sellers in the Atlanta market that are reasonable will enjoy success.
The Good News
The government was able to chip away at its foreclosure inventory in 2011, reducing it by nearly half, HousingWire reports in analyzing financial statements from three government enterprises. From the end of 2010 to 2011, Freddie Mac, Fannie Mae, and the Department of Housing and Urban Development saw a 49 percent reduction in the number of REO properties it owns. The three government enterprises held about 150,700 properties as of Dec. 31, 2011, compared to 296,000 at the end of 2010.
?The GSEs sold REOs at a record pace in 2011,? HousingWire reports. ?Combined, both sold more than 353,000 previously foreclosed property for the year.? Here?s a closer look by how much the government enterprises trimmed their foreclosure inventories:
- HUD: Reduced its foreclosure inventory to about 32,000, a 47 percent drop from more than 62,000 it held at the end of 2010.
- Fannie: Reduced its foreclosure inventory to more than 118,000, which is down 27 percent from about 162,000 at the end of 2010.
- Freddie: Reduced its REO inventory to 60,500, down 16 percent from more than 72,000 in 2010.
The Bad News
Obviously volume dropped, the robo signing fiasco saw to that. As reported by HousingWire, analysts expect between 900,000 and 1 million homes will move from delinquency into REO in 2012, back to levels seen before the robo-signing slowdown. Servicers moved roughly 800,000 properties through the foreclosure process and into REO liquidation in 2011, according to RealtyTrac. After resolving affidavit problems late last year, banks began moving more properties through the process. JPMorgan Chase analysts expect repossessions to reach as high as 900,000 even with a wave of new alternatives to foreclosure.
Several major policy changes in the last few months have sped up resolution of the pipeline. Of course, new delinquencies will ensure that full resolution will still take years, but the pace may be faster than we expected,? analysts said. Daren Blomquist, vice president of RealtyTrac, said that pace could return this year. ?For 2011 we hit 804,423, not quite the 825,000 we were on pace for because of a slowdown in November and December,? Blomquist said in an interview. ?We are expecting close to 1 million REOs in 2012 as some of the delayed foreclosures finally complete the process this year.?
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