Fannie, Freddie and FHA REO Inventory declines in Q3

By: Calculated Risk

Read the Fannie Mae Third Quarter Report here about the net loss of $5.1 billion in the third quarter of 2011, compared to a net loss of $2.9 billion in the second quarter of the year. The company’s third-quarter loss was driven primarily by two factors: $4.9 billion in credit-related expenses, the substantial majority of which were related to its legacy (pre-2009) book of business; and $4.5 billion in fair value losses driven primarily by losses on risk management derivatives due to a significant decline in swap interest rates during the quarter.

Important: REO inventories have declined over the last few quarters. This is a combination of more sales and fewer acquisitions due to the slowdown in the foreclosure process. However there are many more foreclosures coming. Read more here.

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