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Delinquencies, Foreclosures and REO

by Calculated Risk on 3/04/2022 01:53:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Delinquencies, Foreclosures and REO

A brief excerpt:

Last year, I pointed out that the foreclosure moratorium, combined with the expiration of a large number of forbearance plans, would NOT lead to a surge in foreclosures and impact house prices (as happened following the housing bubble).

Here is some data on REOs through Q4 2021 …

We will probably see an increase in REOs in 2022.

This graph shows the nominal dollar value of Residential REO for FDIC insured institutions. Note: The FDIC reports the dollar value and not the total number of REOs.

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosed houses) declined from $1.11 billion in Q4 2020 to $0.78 billion in Q4 2021. This is the lowest level of REOs in many years. (Probably declined sharply due to foreclosure moratoriums, forbearance programs and house price increases).

The bottom line is there will be an increase in foreclosures in 2022 (from record low levels), but it will not be a huge wave of foreclosures.

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