BofA & Fannie Mae holding inventory = More REOs & Less Auctions

Courtesy of the Cromford Report
h/t Mike Balzotti

In the last three weeks we have seen an interesting and potentially significant new trend. An unusually large number of trustee deeds are being recorded in Maricopa County in August that revert to the beneficiary. These are dominated by two beneficiary entities: Bank of America and Green Tree Servicing LLC (for Fannie Mae). All other lenders are continuing a pattern where most trustee deeds are issue to third parties. However Bank of America and Fannie Mae are taking most of their recent foreclosures back into REO inventory. They do this by setting high opening bids. Perhaps they feel they can get a higher realization by marketing the REO instead of by selling to the third parties at auction. If so, they are probably correct, because far more ordinary owner occupiers are happy to bid on an REO but would not be willing to participate in a trustee auction. As Bank of America and Fannie Mae are two of the largest and most significant foreclosing entities, this is resulting in REO inventory rising. We are also seeing a bump up in trustee deeds even while new notices remain lower than of late.

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