'Shadow REO': As Many as 90% of Foreclosed Properties Held Off the MarketSubmitted by PWA on Tue, 07/17/2012 - 01:21
A pretty, manicured home sits six doors down from Phil Faranda's in Briarcliff Manor, N.Y.
To look at it, most passersby would think that the tidy house is occupied by a nice family that gives it a good amount of TLC: The lawn is mowed, the bushes trimmed, and the siding has what looks like a fresh paint job.
But Faranda knows better.
The bank-owned house has been vacant for 18 months, according to Faranda, a Realtor specializing in distressed properties. Just two notices taped to a window are the only indications that the home is unoccupied.
It might seem curious that such a well-maintained home doesn't have a For Sale sign on its front yard. But it's certainly not unusual.
This home is part of what's known as the "shadow REO" inventory: repossessed homes across the country that banks or investors often purposely keep off the market. The practice isn't a secret, and refraining from dumping a large inventory of foreclosures on the market helps to keep home prices from crashing.