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'Shadow REO': As Many as 90% of Foreclosed Properties Held Off the Market

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.

http://www.thestreet.com/story/11616596/1/shadow-reo-as-many...



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Good Information

Cool, thank's for the information. I am curious if the Treasury/Fed has been instrumental in getting the major mortgage holders to do this? I ask this because Alan Greenspan had advised that the "Housing crisis is from too much housing supply, so they should buy all the vacant houses and then burn them". This is almost the same thing, except no burning and you're not necessarily buying them. They just sit. I dunno but I wonder.