Freddie Looks to Expand REO Financing Program
Freddie Mac is lining up more lenders as it rolls out a program to provide financing for its REO sales across the country.
Under a pilot program, Nationstar Mortgage and Regions Bank are providing financing for REO sales in Florida, Georgia, Illinois and Texas.
The GSE, which sold 94,300 REO properties last year, wants to roll out the financing option in other states where it has high REO exposure, such as California, Michigan and Ohio.
“The ultimate goal is to go national,” said Freddie spokesman Brad German. “We are working to bring other national and regional lenders into the program,” he said. The lenders are expected to provide purchase financing for owner-occupants and investors.
Freddie reported Thursday afternoon that its single-family REO operation was profitable for the last three quarters of 2012. But it recorded a $62 million loss for the full year, compared to a $585 million loss in 2011.
Freddie attributes the higher recoveries on sales to the improvement of home prices.
But REO activity was impacted by lower sales and longer foreclosure processing times. Freddie acquired 82,800 REO properties in 2012, down 16% from the prior year.
“We also believe that resource constraints on foreclosure activities for the five larger servicers involved in the February 2012 settlement with a coalition of state attorneys general and federal agencies further limited our REO acquisition volume in 2012,” according to Freddie’s fourth-quarter financial report.