‘Shadow REO’: As Many as 90% of Foreclosed Properties Held Off the Market, Estimates Suggest

‘Shadow REO’: As Many as 90% of Foreclosed Properties Held Off the Market, Estimates Suggest

A pretty, manicured home sits six doors down from Phil Faranda’s in Briarcliff Manor, N.Y.

To look at it, most passersby would think that the tidy house is occupied by a nice family that gives it a good amount of TLC: The lawn is mowed, the bushes trimmed, and the siding has what looks like a fresh paint job.

But Faranda knows better.

The bank-owned house (pictured above) has been vacant for 18 months, according to Faranda, a Realtor specializing in distressed properties. Just two notices taped to a window are the only indications that the home is unoccupied.

It might seem curious that such a well-maintained home doesn’t have a For Sale sign on its front yard. But it’s certainly not unusual.

This home is part of what’s known as the “shadow REO” inventory: repossessed homes across the country that banks or investors often purposely keep off the market. The practice isn’t a secret, and refraining from dumping a large inventory of foreclosures on the market helps to keep home prices from crashing.

But the extent to which lenders keep their stock of REOs — industry parlance for “real estate owned” properties — off the market may be much larger than most people think.

As many as 90 percent of REOs are withheld from sale, according to estimates recently provided to AOL Real Estate by two analytics firms. It’s a testament to lenders’ fears that flooding the market with foreclosed homes could wreak havoc on their balance sheets and present a danger to the housing market as a whole.

Rest here…

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4closureFraud.org

Comments
7 Responses to “‘Shadow REO’: As Many as 90% of Foreclosed Properties Held Off the Market, Estimates Suggest”
  1. readdocs says:

    Lots of those vacant homes are not even cleared from the foreclosure process…and that way the bank can
    keep from listing them as liabilities on their books. That is why counties and municipalities are now going
    after the “owner” who moved out, sometimes years ago, for back taxes, fines, and penalties. Because
    the ex owner still shows up on the tax books as the owner of what is an abandoned property. The banks have
    been doing this for nearly 10 years.

    The above photo looks like one taken in Detroit, which is now rampant with abandoned homes and buildings.

  2. StuckinSoPa says:

    “If Obama loses, he can blame the RE crash on Romney!”

    That would actually be a no-lose situation for any sitting president. If you lose, order Freddie and Fannie to dump the trash right after election since you are still in charge, therefore hammering the incoming parasite in chief (hate ALL politicos, can’t you tell) with the results. If you win, still dump the toxic waste since you don’t have to worry about being re-elected, and it will be four years down the road before next election. American sheeple have disgustingly short memories.

    On a side note, the bank is maintaining the place next to me. A lawn company comes around to mow EVERYTHING (flower bed, rosebushes, anything standing) when needed and the bank even sent contractors in to finish the siding job that the previous homeowner started but couldn’t finish. The old place looks great from the road. Too bad that the winterization team (all Mexicans none of whom spoke English) ripped out all the fixtures, copper wiring, copper water pipes, and even removed the copper lines to the outside AC unit. But like I said, it looks great way out from the road.

  3. HERMAN VERGARA says:

    What a shame in this great country to see these houses without a family to take care of them and THE BANKS taking them away, only to let them rotting. Shame on the BANKS.

  4. Star says:

    According to a realtor friend of mine, Fannie & Freddie have been ordered to keep foreclosures off the market until after the election.

    Agents hired for re-hab work and listing the homes were supposed to start in August on millions of homes (Fannie & Freddie own the most mortgages now). They bought vans and hired staff for this. They were recently told to hold off until September to begin rehab, and to begin listing them after the election in November.

    You won’t find an agent who will report this to the media – they don’t want to ruin the opportunity they have to make big bucks in the future. But they have told friends and other agents, so I am passing this info on to everyone I can.

    Refi or sell now – before prices plummet again.

    If Obama loses, he can blame the RE crash on Romney!

    • Teke Wiggin says:

      Star, that’s really, really interesting. I would definitely write a story about that if I could get a few sources to go on the record. If there’s even a small chance anyone you know would be willing to talk to me about this — on, or off the record, please contact me: teke.wiggin@huffingtonpost.com.

      • Star says:

        Start digging around in Las Vegas, NV. As I said, they will not tell media and risk losing their only income in months!

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