Out of the shadows: projected levels for future REO inventory

Nearly one homeowner in ten is more than 90 days delinquent on his mortgage payment. Most of the homes under these mortgages are likely to be repossessed by lenders and resold, which has led some to call them a shadow inventory. How much these homes will affect the broader housing market depends on...

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Bibliographic Details
Published in:Economic commentary (Cleveland) 2010-10, Vol.2010-14 (2010-14), p.1
Main Author: Venkatu, Guhan
Format: Article
Language:English
Subjects:
Delinquency
Foreclosure
Homeowners
Inventory
Mortgages
Real estate industry
Repossession
Retention
Sale or exchange of residence
Sales
Studies
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Summary:Nearly one homeowner in ten is more than 90 days delinquent on his mortgage payment. Most of the homes under these mortgages are likely to be repossessed by lenders and resold, which has led some to call them a shadow inventory. How much these homes will affect the broader housing market depends on when they actually become available for sale and how long they remain on the market. Some analysts are concerned that a surge in the availability of repossessed or real-estate owned (REO) properties, or a persistently high level of them, could put downward pressure on prices. This could, in turn, induce additional foreclosures. This Commentary presents three possible scenarios for future REO inventory levels.
ISSN:0428-1276
2163-3738