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Freddie Mac and Fannie Mae Foreclosure Lists Continue to Expand

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By : John Cutts    99 or more times read
Government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae are currently sitting on a huge supply of foreclosure lists that they are trying to sell in a manner that will not cause a drastic surge in foreclosure numbers in the U.S. The two mortgage giants are also gradually releasing these distressed properties into the market to prevent a further depression in home prices.

However, the number of foreclosed houses under the firms' books has continued to rise and has reportedly already created a massive backlog that can potentially cause huge problems within the firms and for the housing industry in general. Industry analysts have stated that if these properties are not released to real estate auction sales and other channels, the consequences will be considerable.

The amount of foreclosed properties currently held by the GSEs reportedly has a value of around $24 billion. The total number is around 242,000 which have been accumulated in the past three years. This number accounts for almost one third of the total repo houses in the whole country, with the number expected to rise further in the coming years.

Housing market analysts have reported that the mortgage firms are taking in more properties into their foreclosure lists faster than they are unloading them. As an example, the mortgage giants had taken in over 319,000 of these properties during the January-September 2010 period, but were only able to unload over 210,000. The timing is less than ideal, analysts have stated, given that the latest housing price data is showing a decline of 1.6% in home prices across the U.S.

Freddie and Fannie officials have tried to ease industry worries over the potential increase in bank owned houses and foreclosures in the country should the two firms try to dispose even a small percentage of their backlogs. Both firms have asserted that they are going to stick with their approach of gradual introduction of the properties into the market.

They also stated that properties in the foreclosure lists are being sold at prices that are as close as possible to market rates to prevent further market destabilization. Also, officials have revealed that they are prioritizing buyers who are looking for a place to live rather than buyers who plan to flip or rent out the properties.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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