When will REO sales finally reach the peak?

Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.
Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.
However, with the surge, “we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” the analysts said.
The increase in foreclosures is expected to mostly change from private banks’ portfolios – which nearly half are from now – to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.
To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals, and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.

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