Freddie may need at least a decade to unload foreclosures

Freddie Mac vendors sold fewer REO properties (real estate owned by lenders via foreclosure) in the third quarter than they did earlier in the year as nonperforming loans continue to climb, Housing Wire reported.

More than 25,300 repossessed homes held by Freddie Mac sold in the third quarter, down 13.5 percent from the nearly 30,000 in the previous three months. It was also a 17 percent decline from the record-setting 31,600 sold in the first quarter.

At the same time Freddie unloaded the 25,300 REO, it repossessed another 24,300 homes back into the inventory. At the end of the quarter, Freddie held 60,000 REO on its books, which has been trimmed – as new foreclosures are completed – from 75,000 one year ago.

If the current trend holds, and the GSE reduces a net 1,000 REO from its inventory every quarter, it would take 60 quarters to unload its entire inventory – roughly 15 years.