Foreclosures on Federal Housing Administration-insured loans spiked by more than 40% in fiscal year 2010 as losses per REO averaged $76,000, according to new government figures.
FHA acquired 98,350 REO properties at an acquisition cost of $11.4 billion and sold 87,700 units for $5.7 billion. The average loss on each sale was $76,000, compared to $70,600 in 2009.
Most of the loans foreclosed upon were originated during the height of the housing boom and do not reflect recent FHA production.
The average size of an FHA-insured loan originated in 2010 was $175,000. (The figures, which reflect results for year ending Sept. 30, recently appeared on HUD's website, as part of an annual report released by the agency.)
Department of Housing and Urban Development officials said the government insurer's losses on REO properties "are in line with industry's losses in today's market."
Meanwhile, FHA is in the final stages of restructuring its contracting procedures for REO property management and sales. The agency says this restructuring will "increase net returns, decrease holding times, ensure properties are safe and secure from hazardous conditions and maintained in a manner that preserves communities."
