Are Banks and Servicers Hungry to Unload REO?

Perhaps, one day we will all look back at the past two years and say, “Boy, that was a great time to buy a house – prices were so low, and so were rates.” Well, we know the rate part is correct, as for whether we’ve reached a bottom in home values, the jury is still out. We all keep seeing reports that the Washington metropolitan area appears to be healthy and lower priced homes in California and Florida are selling at a somewhat swift pace. (Anything that isn’t lower priced isn’t going anywhere.) Meanwhile, National Mortgage News continues to hear stories about banks of all sizes hanging onto their delinquent loans because if they sold this crap in the secondary market they would be forced to take an ever bigger loss on it. But apparently at least REO properties are moving and a new report from Redfin.com shows that bank-owned homes and short sales consistently sell for closer to their list prices than do non-distressed homes. This apparently applies to homes in different price ranges, though the volume of distressed sales is weighted toward the low end.