A surge in foreclosures is expected in the coming months

Bad mortgages dating back to the height of the pandemic are expected to drive a surge in foreclosure activity in the next 12 months, but foreclosure rates are still expected to remain below their pre-pandemic historical averages. Auction.com claim.

Forecasts by the nation’s leading distressed asset market are based on a survey of approximately 50 Auction.com clients, including private sector mortgage servicers and government-sponsored enterprises (GSEs). The study, called the Seller Insights report, found that 9 out of 10 of her mortgage servicers expect foreclosure volumes to increase in the next 12 months.

The survey asked Auction.com customers about their expectations for severely delinquent (SDQ) mortgage outcomes. Many of these mortgages have lost protection from moratorium programs enacted early in the COVID-19 pandemic. This loss of tolerance protection is expected to be a major driver of future foreclosures in the run-up to rising interest rates, regulatory factors, recessions, or home equity woes.

CEO Jason Allnut said: of Auction.com. “Most of the default servicing industry expects foreclosures to gradually increase over the next year, but expects a higher proportion of delinquent mortgages to avoid foreclosures than the historical average prior to the pandemic. ”

As for Auction.com customers, a survey found that approximately 23% expect their SDQ inventory as of June 2022 to be put up for seizure auction “within the next 12 months,” Auction.com reports. I’m here. However, about 20% of customers expect more than his 30% of his SDQ inventory to be seized in the next 12 months.

“Expected SDQ to Foreclosure Roll Rate [23%] Auction.com said in announcing the Seller Insights survey results. “His Auction.com clients surveyed estimate that, on average, 72% of his SDQ inventory will hold at least 10% of his stake as of June 2022. increase.”

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Government-backed mortgages and properties located in the Midwest are most likely to see an increase in foreclosures, according to survey respondents.

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