The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Real estate: Will banks jump on REO speedwagon?

US Fed to incentivize investors; Single-family homes new asset class

Colin Wiel, Waypoint

In its January white paper on the US housing market, the Federal Reserve laid out its proposal for a solution to the foreclosure backlog plaguing banks and the government-sponsored entities (GSEs) – tax incentives to investors to buy up portfolios of REOs (real estate owned – properties that have been foreclosed upon and are now owned by the banks or the GSEs) and turn them into rental properties. Regarded by some in the housing market as the Fed over-stepping its authority by involving the taxpayer in solving the issues of the GSEs and banks, the paper nonetheless has highlighted a solution to the high number of foreclosures on balance sheets.

There are an estimated 500,000 REOs in the US, and that is likely to increase during the next few months as legal impediments to foreclosure, resulting from investigations into robo-signing and foreclosure practices, are worked through. In total, there are 1.9 million units in the US in a state of foreclosure.

One analyst says he expects the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, to start issuing investor programmes within months.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree