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Recycling REO: Disposition Strategies in the Continuing Crisis

Recycling REO: Disposition Strategies in the Continuing Crisis. Matt Perrenod, Chief Lending Officer Housing Partnership Network. Where Are We?. Home Values Continue to Fall:. Where Are We?. Rate of foreclosure down, but still high:. More to Come:. Hot Spots. Worst-Hit Markets.

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Recycling REO: Disposition Strategies in the Continuing Crisis

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  1. Recycling REO: Disposition Strategies in the Continuing Crisis Matt Perrenod, Chief Lending Officer Housing Partnership Network

  2. Where Are We? Home Values Continue to Fall:

  3. Where Are We? Rate of foreclosure down, but still high:

  4. More to Come:

  5. Hot Spots

  6. Worst-Hit Markets

  7. Absorption Still Slow

  8. Fewer Homeowners

  9. Vacant Inventory is Piling Up

  10. Federal Response • Some moves to prevent foreclosure: • AG Settlement • Mandates on big 5 for principal reduction • Public/private pilots • Mortgage Resolution Fund • National Council of La Raza • Ocwen & other private-label • State-run HHF

  11. Federal Response • Can we absorb excess single-family inventory through rental disposition? • RFI from FHFA and FHA • Working group among FHFA, FHA, Treasury, others

  12. Fannie Pilot • Pilot offering from Fannie in FL, GA, IL, NV, SoCA, and AZ • Promise of more to come • Two structures: cash sale & joint venture w/ Fannie • Due diligence period in process, sealed bids in April

  13. Inventory & Rent Growth

  14. Concerns • Who will own? • How will they be managed? • How long will they stay rental? • How much will there be?

  15. Role for Mission Entrepreneurs? • Feds Engaging in conversations • Definite encourage to private equity to talk with non-profits • Weighting of community concerns not clear • Capital and operational challenges

  16. Summary • Market hasn’t kept up with inventory sufficient to support prices • Major current is economic growth – if strong, defaults will decrease, absorption increase • Too early to say, so rental disposition efforts are going forward, should continue this year • Operational challenges are large

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