As a result of COVID-19, Fannie and Freddie kept disposing of REO in Q2, but there were very few acquisitions.
Fannie and Freddie earlier reported results earlier for Q2 2020. Here is some information on Real Estate Owned (REOs).
Freddie Mac reported the number of REO declined to 2,812 at the end of Q2 2020, compared to 5,869 at the end of Q2 2019.
For Freddie, this is down 96% from the 74,897 peak number of REOs in Q3 2010.
Fannie Mae reported the number of REO declined to 12,675 at the end of Q2 2020 compared to 17,913 at the end of Q2 2019.
For Fannie, this is down 92% from the 166,787 peak number of REOs in Q3 2010.
Click on graph for larger image.
Here is a graph of Fannie and Freddie Real Estate Owned (REO).
REO inventory decreased in Q2 2020, and combined inventory is down 35% year-over-year.
This is probably lower than a normal level of REO.
It takes a long time to go from delinquency to foreclosure to REO. And homeowners who are struggling are probably in forbearance.
So any increase in REOs from COVID-19 won’t happen for a long time. Since underwriting has been fairly solid over the last decade, I don’t expect a huge increase in COVID-19 related REOs unless the health crisis goes on for an extended period.