February 23, 2011 (Shirley Allen)
The Federal Housing Administration (FHA) released its December Monthly Report which showed that the agencies Real Estate Owned (REO) inventory was at 60,739 at the end of December, up 9.5 percent from 55,488 in November, and up 47.5 percent from December 2009.
The report estimates the current value of its REO properties to be $9.1 billion.
Combined with the two GSE’s, Freddie Mac and Fannie Mae, the U. S. Government holds roughly 360,000 REO Properties.
In its annual financial status report to Congress in November, the FHA claimed loans insured before 2009 are responsible for 70 percent of the expected single family loan losses. Though they are now prohibited, so-called “seller-financed down payment assistance loans” produced $6.6 billion in claims to-date and may ultimately cost the FHA $13.6 billion.
The FHA expects to see an increase in the number of REO properties in the future as they have reported that approximately 600,000 properties are in serious delinquency.
Here is a graph of Fannie, Freddie and FHA inventory over the last three years through Q3 2010:
Tags: FHA, REO, single family loan losses, seller financed down payment