Countrywide / Bank of America REOs Fall to February 2007 Levels

The Countrywide Foreclosure Blog reports that there are currently 5,959 foreclosed homes being offered for sale on the Bank of America/Countrywide website, down from the peak of 21,500 in November 2008, and back to levels of February 2007 (see chart above, click to enlarge).

Below are charts for the individual states that had some of the worst foreclosure problems (AZ, CA, FL and NV), showing significantly reduced levels of lender-owned (REO) properties in October 2009. In all four states (AZ, CA, FL and NV), the REO levels are at two-year lows.

Comment: Although these foreclosure data are for just one mortgage company, Countrywide was (or still is) the largest mortgage company in the U.S. and it financed 20% of home mortgages in 2006, so this reduction of foreclosed homes for sale by Countrywide to early 2007 levels provides evidence that the real estate market has recovered significantly from the fall 2008 peak in REOs. Previous CD posts have presented evidence that the real estate markets in Florida, California and elsewhere have exhibited ongoing sales gains in recent months, increases in median home prices, and reductions in inventory levels. And with 30-year mortgage rates falling to 4.87%, all of the ingredients are in place for a continued real estate recovery, along with a general economic rebound.

Comments

[MyrEnforker:]

1st time homebuyer credit. Enough said.

Oct 09 08:37 AM

[Lok Sang Ho:]

What does REO stand for? Why are lender owned properties called REOs?

Oct 09 12:51 PM

[c smith:]

REO = Real Estate Owned

Question: Has Countrywide (like other lenders) slowed the flow of delinquent properties into the REO category? For many banks, delinquencies continue to rise, but the REO line has not. This is because they've extended the holding period for bad property. In other words, they've put off foreclosure because they don't have the capital to absorb the kind of writedowns that come with moving a large number of homes to the REO category.

Oct 09 01:15 PM

[c smith:]

seekingalpha.com/artic...


On Oct 09 01:15 PM c smith wrote:

> REO = Real Estate Owned
>
> Question: Has Countrywide (like other lenders) slowed the flow of
> delinquent properties into the REO category? For many banks, delinquencies
> continue to rise, but the REO line has not. This is because they've
> extended the holding period for bad property. In other words, they've
> put off foreclosure because they don't have the capital to absorb
> the kind of writedowns that come with moving a large number of homes
> to the REO category.

Oct 09 01:18 PM

[reneeg:]

Isn't the government buying these bad mortgages in huge numbers? This is good news for the banks. How about total REOs including those held by the US government?

Oct 09 01:26 PM

[WaREOAgent:]

From personal experience as a busy REO agent, I am seeing Bank of America postponing their foreclosures for very long periods of time. They are dragging their feet in processing short sales and so there is a huge amount of their inventory in limbo, not showing up on the REO screen. Something has to happen to this inventory and I think we will see it hit in 2010 - many of the short sales are falling apart due to length of time Bank of America is taking on responding.

Oct 09 11:19 PM

[Moose Shape...:]

Wow Mr Perry. You are truly drinking the cool aid. As a real estate agent, i can tell you that ALL circumstantial evidence at this time points to a huge backlog of bank homes that are just waiting to hit the market. The reasons and speculations for why the bank owned inventory has slowed the last several months are varied. But nonetheless, the huge backlog truly appears to be there and ready to hit.

So I do not buy your rosey optimism at all! I have read several of your posts and for the most part, I think you are, respectfully, out to lunch.

Oct 10 02:11 AM

[REOBroker:]

Mr. Perry, I would suggest you do your homework before making such irresponsible statements. There is a record number of REO "shadow" inventory in process that will be on the market in 2010. The REO inventory has diminished for two reasons: 1) the banks, at the urging of the federal government, instituted a foreclosure moratorium from November 2008 through May 2009, which effectively halted foreclosure filings and nearly stopped the flow of REO listings. Thus, our current REO inventory is very low; however, there is now a seven month back log of "shadow" inventory that is in process. 2) The compliance regulations for TARP are prolonging the foreclosure process and have also contributed to the decreased REO inventory. But I can tell you on the east coast of Florida where I live and list and sell REOs, our foreclosure filings over the last three months have been at record levels. So while there may be a temporary stabilization of the market, it is just that, temporary.

Oct 10 12:53 PM

[tmarch:]

Mr. Perry!

There is not one piece of fact to most of your articles. You use twisted statistics to prove your points without any kind of factual use of truth.

Fact 1: foreclosures continue numbers continue to rise. Institiutions are just not finalizing the foreclosure process or releasing them into the present market. Banks are hiding their bad assets to prevent the FDIC from closing down their businesses. The Obama plan is to present a message of good news to stimulate the economy (which may not be that negative) and buy some time to get his health care plan moving forwards. By the way, I did vote for him.

Fact 2: Commercial real estate is getting ready to begin its time of foreclosure and workouts. Which in turn will lead to more job layoffs and weakening of the economy.

Fact 3: You will see an increase in REO properties in the first quarter of 2010. This will bring your whole argument down the drain.

The bad news is far from over and things will get worse before they get better. I predict a further decline in the housing market in 2010-2011 from 10-15% as inventory levels increase. Industry experts predict that 50% of homeowners accross the nation will be underwater on their homes in 2011.

Let's look back in a year or two and see who was right...I am sure it will not be your silly opinions.

Oct 10 12:59 PM

[Buckoux:]

Mr. tmarch!

You don't really believe this statistic that you pulled out of your.....well, I'll keep it clean.


On Oct 10 12:59 PM tmarch wrote:

> Mr. Perry!
>
> Industry experts
> predict that 50% of homeowners accross [sic] the nation will be >underwater on their homes in 2011.

Oct 10 02:18 PM

[2houndz:]

DuetscheBank research is estimating that half of all American MORTGAGEES will be underwater by 2011, as opposed to half of all homeowners. Obviously, the few that own their house outright cannot be underwater. The house cannot be worth less than nothing.

www.reuters.com/articl...

Oct 10 02:40 PM