Journal Article

Out of the shadows: projected levels for future REO inventory

Abstract: 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.

Keywords: Foreclosure; Mortgage loans; Housing - Finance;

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2010

Issue: Oct

Order Number: 14