Foreclosures are expected to rise slowly in the second half of 2024, while ample home equity should prevent many properties in impairment status from entering foreclosure, a survey of mortgage default servicing leaders shows state.
auction networkDistressed Home Sales Market released its 2024 Seller Insights Report on Friday. The report covers a variety of insights from default services professionals who were surveyed at the firm’s annual resolution summit in April.
Fifty-seven percent of respondents expect their organization’s foreclosure volume to increase by 1% to 4% in the second half of this year. 10% expect growth of 5% or more, while another 10% expect a decline of 5% or more.
“Foreclosure completions this year remain at about half of 2019 levels, thanks in large part to the coronavirus pandemic,” Joe Cutrona, chief commercial officer at Auction.com, said in the report. Stronger loss mitigation options.
According to the Auction.com report, half of the loans in impairment status at the time of the survey were expected to be “permanent” and avoid foreclosure status. This includes 58% of conforming loans Fannie Mae and Freddie Mac49% were government-backed loans and 34% were non-agency loans.
Home equity levels also played a role in these responses, as respondents estimated that the combined loan-to-value ratio for severely delinquent loans (90 days or more past due) in their portfolios averaged 65%.
“Mortgage servicers and policymakers are creatively using home equity buffers to help distressed homeowners avoid foreclosure,” Elan Chambers, senior vice president of strategic partnerships and business development at Auction.com, said in the report express.
Respondents cited rising homeowner insurance and property tax costs as the biggest potential risks to higher delinquency rates in 2024. rise, commercial mortgage defaults, and declines in home prices.
“While the risk of a rapid rise in delinquencies in the short term remains low, there are already some signs of consumer and homeowner stress,” said Darren Blomquist, vice president of market economics at Auction.com.
Default servicing professionals were also asked about their views on unemployment, mortgage rates and home prices. Respondents expect the U.S. unemployment rate to reach 3.6% this year and average mortgage rates to fall to 6.3%. Three-quarters of respondents believe that house prices will maintain positive appreciation through 2024, while 21% expect house prices to fall by less than 5%.
“Our partners in default servicing are on the front lines of any emerging risks in the mortgage market, and we communicate with them regularly to identify these risks and build valuable solutions,” said Jason Allnutt, CEO of Auction.com.
“Nearly halfway through the year, industry leaders tell us that the risk of a rapid rise in delinquencies and foreclosures this year remains low, and they expect a soft landing for the housing market and the broader economy, despite expectations that mortgage rates will Keep it at a relatively low level.
