The government's mortgage operators made REOs disappear in 2011, but will they reappear in 2012?

The Department of Housing and Urban Development released data last week that both GSE and its own REO inventories were reduced by nearly 50 percent in 2011, a result of both higher sales and the robo signing-inspired foreclosure freeze.

According to a HousingWire article on the data, the government entities decreased their holdings from 296,000 properties at the end of 2010 to just 150,700 at the end of 2011, a 49 percent decline.

The Federal Housing Administration (FHA) decreased its inventory by 47 percent, from 62,000 to 32,000; Fannie Mae’s fell 27 percent from 162,000 to 118,000, and Freddie Mac’s was down 16 percent from 72,000 to 60,500.

A big part of the reductions was increased sales. Fannie and Freddie combined sold more than 353,000 REOs in 2011, and two-thirds of Freddie’s sales (110,000 total) went to owner-occupants, an intriguing ratio in light of the GSE’s pending REO rental program.

Those advances, though, may be temporary, especially when considering the amount of seriously delinquent homes the government must still process in the coming months.

In a statement released on Friday, Freddie Mac said 2011’s declines may be temporary, given the advent of foreclosures following the multi-state mortgage settlement.

“We expect the pace of our REO acquisitions will continue to be affected by delays in the foreclosure process in 2012, but the volume will likely remain elevated due to the company’s large inventory of seriously delinquent loans that will likely complete the foreclosure process and transition to REO during 2012,” Freddie stated.

The seriously delinquency rate at the FHA was 9.6 percent at 2011’s end, and the number of loans in serious delinquency rose by 19 percent through the year; news was a bit brighter for the GSEs, though, where Fannie’s serious delinquency rate fell from 4.45 percent to 3.91 percent, and Freddie’s fell from 3.84 percent to 3.58 percent.