A
survey
of

mortgage
default
servicing
leaders
revealed
that

foreclosures
are
expected
to
rise
slowly
during
the
second
half
of
2024,
while
ample
amounts
of
home
equity
should
keep
many
properties
in
loss
mitigation
from
moving
into
foreclosure
status.

Auction.com,
a
marketplace
for
distressed
home
sales,
released
its
2024
Seller
Insights
report
on
Friday.
The
report
covers
a
wide
variety
of
insights
from
default
servicing
professionals
who
were
surveyed
at
the
company’s
annual
Disposition
Summit
in
April.

Fifty-seven
percent
of
survey
respondents
expect
growth
of
1%
to
4%
in
their
organization’s
foreclosure
volumes
during
the
latter
half
of
this
year.
Ten
percent
expect
an
increase
of
5%
or
more
while
another
10%
anticipate
a
decrease
of
5%
or
more.

“Completed
foreclosure
volumes
have
remained
at
about
half
of
their
2019
levels
this
year
thanks
in
large
part
to
more
robust
loss
mitigation
options
coming
out
of
the
pandemic,”
Auction.com
chief
business
officer

Joe
Cutrona
said
in
the
report.

Half
of
loans
in
loss-mitigation
status
at
the
time
of
the
survey
were
expected
to
“permanently
perform“
and
avoid
foreclosure
status,
Auction.com
reported.
This
included
58%
of
conforming
loans
purchased
by

Fannie
Mae
and

Freddie
Mac,
49%
of
government-backed
loans
and
34%
of
nonagency
loans.

Home
equity
levels
also
played
a
role
in
these
responses
as
respondents
estimated
that
the
seriously
delinquent
loans
(90
or
more
days
past
due)
in
their
portfolio
had
a
combined
loan-to-value
ratio
of
65%
on
average.

“The
home
equity
cushion
is
being
creatively
utilized
by
mortgage

servicers
and
policymakers
to
help
distressed
homeowners
avoid
foreclosure,”
Elan
Chambers,
Auction.com’s
senior
vice
president
of
strategic
partnerships
and
business
development,
said
in
the
report.

Rising
costs
for

homeowners
insurance
and
property
taxes
were
cited
by
respondents
as
the
biggest
potential
risks
for
higher
delinquency
rates
in
2024.
These
“hidden”
homeownership
costs
led
the
list
of
risk
factors,
followed
by
rising
consumer
debt
delinquencies,
rising
unemployment,
commercial
mortgage
defaults
and
declining
home
prices.

“Although
the
risk
of
rapidly
rising
delinquencies
in
the
near
term
remains
low,
there
are
some
signs
of
consumer
and
homeowner
stress
emerging,”
said
Daren
Blomquist,
Auction.com’s
vice
president
of
market
economics.

Default
servicing
professionals
were
also
asked
for
their
views
on
unemployment,
mortgage
rates
and
home
prices.
Respondents
expected
the
U.S.
unemployment
rate
to
end
this
year
at
3.6%,
with
mortgage
rates
declining
to
an
average
of
6.3%.
Three
in
four
respondents
believe
that
home
price
appreciation
will
remain
positive
through
2024,
while
21%
anticipate
a
pullback
of
less
than
5%.

“Our
partners
in
the
default
servicing
industry
are
on
the
frontlines
of
any
emerging
risk
in
the
mortgage
market,
and
we
communicate
regularly
with
them
to
identify
those
risks
and
build
solutions
of
value,”
Auction.com
CEO
Jason
Allnutt
said.

“Nearly
halfway
through
the
year,
leaders
in
this
industry
are
telling
us
that
the
risk
of
rapidly
rising
delinquencies
and
foreclosures
this
year
remains
low
and
that
they
expect
a
soft
landing
in
the
housing
market
and
broader
economy
despite
an
expectation
that
mortgage
rates
will
remain
relatively
high
throughout
the
remainder
of
the
year.”

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