My question is, what is really, physically happening with those ‘shadow’ REOs? They are in the possesion of the banks,and not on the market for various reasons. Are they being inhabited? If yes, by whom, and do they pay for it? If not, it must cost a pretty penny to maintain all those houses. If they aren’t, then the houses are degrading, being abandoned. Any other alternative?
I can understand the ‘dribble out slowly’ process, but they must reach soon such a glut of properties, the dam will burst!
I can understand why they have slowed down the process from NOD to REO (too many REOs already), but it’s just a matter of short time before the banks will be overwhelmed with too many repossesed properties to handle.
So, yes, I think the other SHOE is about to drop hard, though not sure in what form. The market may not be flooded with REOs all of a sudden, but something worse might happen because of not doing that.
