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For months, I have mentioned in passing the potential impact the so-called “shadow” inventory might have on (i) the housing recovery and (ii) residential investors in general.
While everyone knew this inventory (comprised of homes with loans more than 90 days past due that have not been foreclosed and are not on the market) existed, it was unclear as to its size...
...until now.
Now, thanks to the Inspectors General of the Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD), we have some idea as to the size of the shadow inventory and the threat it poses to the soundness of Fannie, Freddie and HUD.
According to their joint report, 2.7 million homes comprise the shadow inventory. For every REO property in the Fannie/Freddie portfolio, there are more than six homes in the shadow inventory. For HUD, the ratio is 20 to 1 in favor of shadow properties.
John Grant
is the president of the Distressed Property Coalition, a private advocacy effort formed by the top leaders in the residential real estate industry, and dedicated to private market solutions, smaller government, and protecting taxpayers. DPC exists because investors deserve an easier path to buy and sell houses. Investors deserve to shape policies that govern them, not to be subjected to them. Investors deserve better information on current laws and policies. Investors deserve a safe environment to learn more about the industry. DPC is dedicated to providing these services to the residential real estate community. Their content and track record of success in Washington are unprecedented for this industry.
To received Mr. Grant’s policy briefings and newsletter, please visit www.distressedpropertycoalition.com