Hoping to boost sales of foreclosed homes, Freddie Mac is offering up to 3.5 percent in closing-cost assistance to homebuyers and a $1,200 bonus to buyer’s agents for offers on HomeSteps properties received by July 31 with escrow closing on or before Sept. 30.
On the purchase of a home priced at $150,000, for example, HomeSteps will pay up to $5,250 toward closing costs. Investors are not eligible for Freddie Mac’s HomeSteps summer sales promotion — only homes sold to owner-occupants qualify.
Similar closing-cost incentives offered by Fannie Mae on HomePath properties this spring require escrow to close by June 30, with Fannie Mae advising that offers submitted after May 15 may not meet that deadline.
In its most recent quarterly report to investors, Freddie Mac reported 65,159 single-family homes in its "real estate owned" (REO) inventory at the end of March, down 10 percent from Dec. 31 but up 21 percent from the same time a year ago.
REO sales during the first three months of 2011 were up 44 percent from a year ago, to 31,628, outpacing REO acquisitions, which were down 16 percent from a year ago, to 24,709.
Freddie Mac said the robo-signing controversy slowed the pace of REO acquisitions in the fourth quarter of 2010, and that delays related to concerns about deficiencies in foreclosure documentation practices continued in first-quarter 2011, particularly in judicial foreclosure states.
Although foreclosure proceedings generally resumed during first-quarter 2011, the rate of foreclosure completion was slower than before the robo-signing controversy broke.
Freddie Mac said it expects the pace of REO acquisitions to increase in the remainder of 2011, in part due to the resumption of foreclosure activity by servicers.
The mortgage giant also expects REO inventory to grow, because housing markets have a limited capacity to absorb large numbers of foreclosed properties. Also, about one-third of the company’s REOs that could not be marketed at the end of March were still occupied, or were still inside a window during which former owners had a legal right to reclaim their home.
Fannie Mae reported that its REO inventory was up 39 percent from a year ago at the end of March, to 153,224 homes. That’s despite the fact that REO acquisitions during the first quarter were down 13.5 percent from a year ago, to 53,549, and that Fannie Mae boosted REO sales by 65 percent, to 62,814.
"We anticipate that it will take years before our REO inventory is reduced to pre-2008 levels," Fannie Mae said in its last quarterly report to investors.