REO inventory poses epic challenges
VOLUME 2, ISSUE 2 MAY 2011
EDITORIAL Life has been interesting, even a bit dramatic, for those of us working in the REO space. As RealtyTrac’s Rick Sharga says in his article inside our HWFocus REO Management supplement, “To suggest that the housing market and mortgage industry are in turmoil would be an understatement of epic proportions.” Everyone involved with REO — from the servicers to the real estate brokers and vendors — will be involved in significant REO disposition efforts over the next three to four years. More than 1 million properties were repossessed during 2010, according to RealtyTrac, adding to a burgeoning “shadow inventory” of distressed properties not yet on the market, but creating downward pressure on pricing by their mere existence. Beside working through the shadow inventory, we’ve got the Dodd-Frank Act, a settlement in the works involving robo-signing issues, a discussion on national servicing standards and attempts to reform the governmentsponsored enterprises on our plates. Add to the mix technology developments and a big push toward short sales. Is your head spinning yet? For a broker, things may seem a bit slow.
It was also the largest yearly decrease since 2005. But RealtyTrac CEO James Saccacio said the lull will prove to not be due to improving conditions in the housing market. Instead, the slowdown came from mortgage servicers disrupted by problems in the foreclosure process, an issue that dragged down filings in January as well. Bob Hagmann, an REO agent with West Islands Realty in Cape Coral, Fla., said whatever the plan is, agents like him will have plenty of work to do. “I don’t think any (GSE) plan including a merger will hurt REO brokers because sooner or later the properties will have to be sold and the units that are 90-plus days in default have less than a 1% chance of coming current on their loan even if the loan was modified,” Hagmann said. “So they will sooner or later make it to our desk.” We hope this issue of HW Focus REO Management will give you the tools you need to succeed in this challenging environment.
Kerry Curry, Executive Editor
ASSOCIATE PUBLISHER Richard Bitner EXECUTIVE EDITOR Kerry Curry REPORTERS Jon Prior, Christine Ricciardi COPY EDITOR Jason Philyaw
CREATIVE SENIOR ART DIRECTOR Polly d’Avignon DESIGNERS Rosangel de Moreira, Jessica Fung, Garrett Broyles
ADVERTISING & BUSINESS SALES DIRECTOR Jesus Machuca jmachuca @ HousingWire.com ACCOUNT EXECUTIVES Christi Lingard clingard @ HousingWire.com Lauren Border lborder @ HousingWire.com MARKETING DIRECTOR Sally Powell Schall WEB EVENTS & CIRCULATION Christina Vick
THE LTV GROUP EXECUTIVE CREATIVE DIRECTOR Greg Lakloufi DIRECTOR OF INTERACTIVE SERVICES Jason Clemens DIGITAL DEVELOPERS Ron Ferguson, Jody Thigpen UX DESIGNER Joe Hair
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EDITOR’S NOTE
In March, the amount of REO coming into Freddie Mac slowed to a trickle. Lenders filed foreclosures or repossessed 225,101 properties in February, a 27% drop from one year before and the lowest total in three years, according to RealtyTrac.
PUBLISHER & EDITOR IN CHIEF Paul Jackson
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