Key Highlights

  • Backlog building among mortgages in foreclosure but not in forbearance
  • Increasing number of seriously delinquent mortgages in forbearance could add to this total in Q2 2021

Growing Number of In-Trouble Mortgages Not in Forbearance

According to data from auction.com, there is a growing number of mortgages in foreclosure or serious delinquency that are not in forbearance. These mortgages are being targeted as the likeliest to restart or continue the foreclosure process when the nationwide eviction moratoria on government-backed mortgages are lifted on March 31, 2021.

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Mortgage and Home Equity Lending Data

Black Knight, a provider of high-performance software, data and analytics for mortgage and home equity lending and servicing, indicates that nearly 900,000 mortgages that are delinquent are not in forbearance of loss mitigation.  An additional 1.8M seriously delinquent mortgages are in forbearance.  The Mortgage Bankers Associationnotes that nearly 9% or 160,000 mortgages are highly likely to exit forbearance in default with no loss mitigation.

“Zombie” Properties Rose to 3-Year High in 2020

“Zombie” or vacant properties in foreclosure rose to a three-year high in 2020. States with the most vacant foreclosures among the 30 states with increasing zombie foreclosures included New York, Florida, Illinois, Ohio and New Jersey, according to auction.com.

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Buyers at Foreclosure Auctions Coming Out of Woodwork

Buyers at foreclosure auctions came out of the woodwork in 2020 with the foreclosure sales rate increasing to a seven-year high, according to auction.com.   States with the highest foreclosure sales rates were Arizona (+78.6%), Wisconsin (+75.0%), Georgia (+73.9%), Indiana (+71.4%) and Virginia (+67.9%).

Foreclosure & REO Sales at 7- and 8-Year Highs

Additionally, foreclosure sales prices also hit a seven-year high in 2020.  States with above-average sales prices relative to estimated market value included Georgia (+99.6%), North Carolina (+95.9%), Tennessee (+93.8%), Arizona (+92.8%) and Virginia (+91.8%).

Clearly, REO auction bidder demand and REO final sales prices jumped up to 8-year highs.  States having the biggest increases in both number of bidders and largest increases in bidder prices included New Jersey, Maryland and California.

Realtors Need To Watch Closely

Coming into 2021, having on-going, solid relationships with mortgage lenders can give the savviest real estate agents a head’s-up concerning mortgages most vulnerable to foreclosure in their respective market areas. Clearly, buyers are interested in growing foreclosure supply levels…agents ought to be as interested.

 

Thanks to auction.com.