Well for those of you who don't know, REO stands for Real Estate Owned, or bank owned properties. As an REO Listing agent I have seen my inventory shrink during 2011, I used to receive several houses to list every month from different clients and now they are down to a handful and I have more houses waiting for foreclosures to be ratified in the courts and evictions than the ones I have actively listed.
It is easy to understand that it might work better this way, because it keeps the demand and supply balanced. My listings are moving quicker and selling to relative higher prices than they were last year. I believe that banks are controlling the inventory so the prices don't drop so much, etc.
Also everybody knows the popular term from last year robosigning, some states have created more obstacles for banks to foreclose on properties and even evict tenants, etc. I know in Maryland the banks have to contact the homeowner and offer the opportunity to apply for modifications, etc. I know some banks hired third party companies to make sure that usually real estate agents visit the homes and deliver documents, call the bank and put the homeowner on the phone, etc.
Today I read a good article that explains in more details why banks are doing this inventory control, not just to avoid property values to drop so much, put to make their books stronger and to manipulate data to their advantage.
It is hard to understand how a borrower can stay at a house for several years without paying mortgage, and getting away with that. Also banks are trying to sell their portfolio to investors rather than retail. And another idea that keeps resurfacing is the rental options.
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Billie, FREE rent for as long as they will let them stay!
There a news story going around that disturbs me greatly and that about about the Federal Govt getting into renting foreclosed inventory. They are claiming they have an excessive amount of inventory and cannot move it fast enough, so they want to get into the rental business!
Last year I believe, Jesse wrote a blog about this very thing and how it's a major step towards a Socialist Govt conversion of our Country. If you think about what is really happening with inventory levels and the govt saying what they are, you might want to be afraid for your job! This is shaping up to be another private sector take over by the federal govt!