Inquiring minds are looking Bloomberg’s article, “Fannie, Freddie’s $24 Billion Glut…” and seeing red…as in lots of red ink:
Fannie Mae and Freddie Mac’s combined inventory of foreclosed residential property has quadrupled in just three years and now stands at a record $24 billion. The number of properties on their rolls — now at nearly 242,000 — has increased fivefold.
That’s roughly a third of the total U.S. portfolio of repossessed homes. And it’s growing because the two mortgage companies operating under U.S. conservatorship aren’t finding buyers faster than new foreclosures come in.
So far, officials at Fannie Mae and Freddie Mac say, the two companies have been trying to stabilize neighborhoods by selling their massive inventory at prices that are close to market. With home seizures projected to increase this year, some housing analysts predict they may have to drop prices, with potentially far-reaching impacts on the real-estate market.
“The concern we have is less what Fannie and Freddie are showing at the moment as defaulted loans and more what’s in the shadow,” said Michael Feder, chief executive officer of Radar Logic, a real-estate data firm based in San Jose, California.
The best laugh in a long time was provided by Jane Severn of Fannie Mae:
“We don’t hold anything back that is available to be sold,” said Jane Severn, director of REO disposition at Fannie Mae. “We’re doing the opposite, pushing our homes out to the market as soon as we can. We don’t have a shadow inventory.”
It is amazing how these government bureaucrats can lie with such utter ease. A shadow inventory has been proven to exist by many different methods. Unless, of course, they have floated away into outer space.
This article is very good and worth the investment of time.
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