Freddie Mac: REO Inventory Affected by Moratoriums

The size of Freddie Mac's real estate-owned inventory is being driven by various foreclosure moratoriums which have led to a 32% vacancy rate, said Ingrid Beckles, senior vice president of default asset management. Speaking at the SourceMedia Mortgage Servicing Conference in Dallas, she said Freddie Mac saw 52,000 in real estate-owned inflow in 2008 with 5,400 properties going through disposition last month. Ms. Beckles stressed how imperative it is for servicers to get to borrowers earlier and restructure loans by using operational efficiencies and proper risk management, parallel to what happens in the origination process. "It's a new concept. Think of it more as offerings and fulfillment. We have to collect documents and get the loan package approved." Its loan modifications over the past five years have seen a 22% redefault rate. Ms. Beckles encouraged servicers to know what loans are sitting in their portfolios and to use targeted risk-based dialing to connect with borrowers. Use automated tracking and case management as well as some type of scoring mechanism to get to these folks earlier, she said. "Foreclosure prevention is moving forward to help add some stability to this tumultuous market."