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Fannie and Freddie Spend Billions on Foreclosures

Not only are Fannie Mae and Freddie Mac losing money on these foreclosed homes, but it is costing them an arm and a leg to maintain them.  A few months go by before a Realtor® is hired to go inspect the property.  During that idle time, the property needs to stay somewhat decent. Fannie Mae and Freddie Mac have spent more than $2 billion in 2010 to maintain more than 240,000 homes they owned at the end of September.

Some of the costs that people don’t see are the legal fees, insurance, taxes, cleaning, and maintenance.  Freddie pays as much as $500 for an initial cleaning on a foreclosed property and $125 to have the lawn mowed twice a month during the summer months.

These costs are expected to rise because of the foreclosure process being slowed down.  It’s not good for the banks and certainly not good for the real estate market.  Little statistics like this really break down the outlook of the market.  These factors are not put into consideration when speculating when the market will level out.  I hate to be pessimistic, but from the looks of it the tunnel is still pitch black.

Here are some foreclosures currently on the market:

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