- 92% surveyed expect foreclosure volume to increase as roll rates from delinquency rise
- 85% surveyed expect home prices to decrease, eroding equity for distressed homeowners
- Respondents estimate seriously delinquent loans have less than 20% equity on average
- Nearly half of seriously delinquent FHA loans have enough partial claim capacity to fund proposed Payment Supplement Account, respondents estimate
Auction.com, the nation’s leading distressed real estate marketplace, today released its 2023 Seller Insights report, which shows that 92 percent of default servicing industry leaders expect completed foreclosure auction volume to increase in 2023 compared to 2022 while 85 percent expect home prices to decline in 2023 compared to 2022.
The report is based on a June 2023 survey of more than 50 leaders in the default mortgage servicing industry at the Auction.com Disposition Summit in Dallas. Survey respondents included default servicing leaders from mortgage asset investors, bank servicers, nonbank servicers, government agencies and government-sponsored enterprises.
Economic conditions will have the biggest impact on foreclosure volumes for the remainder of 2023, according to survey respondents. Respondents also expect roll rates from delinquency to foreclosure to continue to rebound back closer to pre-pandemic levels for the remainder of 2023. Those roll rates dropped to historically low levels during the pandemic with its emergency foreclosure prevention efforts.
Nearly half (46 percent) of seriously delinquent loans insured by the Federal Housing Administration (FHA) have enough partial claim capacity to fund the Payment Supplement Account (PSA) that has been proposed by the U.S. Department of Housing and Urban Development (HUD), survey respondents estimated based on their organization’s portfolio composition.
Survey respondents said they were 32 percent confident on average that their organization could implement the PSA program within the 180-day window suggested in the HUD proposal.
Other survey findings in the report:
- 77 percent of respondents expect a “slight” increase in foreclosure volume while 15 percent expect a “substantial” increase
- 76 percent of respondents expect home prices to decline by single-digit percentages in 2023 while 9 percent expect a double-digit decline
- Survey respondents estimated an average loan-to-value ratio of 82.3 percent for seriously delinquent loans in their portfolio, meaning less than 20 percent equity on average
- Respondents ranked loss mitigation delays as their top disposition challenge
Auction.com is the nation’s leading online marketplace for the disposition of distressed residential properties. The company goes beyond traditional disposition programs, offering tools and services that stabilize neighborhoods, expand homeownership, maximize sales, shorten the sales cycle, yield higher returns, mitigate risks and elevate results. Our seller strategy includes customized and flexible programs, data intelligence and buyer insights, and pioneering technology. This includes Remote Bid®, which expands the buyer base nationwide by letting buyers bid on and win select foreclosure sales from anywhere, and Portfolio Interact™, featuring Bid Interact™. The national footprint for online and in-person auctions includes all 50 states, as well as Washington, DC, and Puerto Rico. Auction.com is headquartered in Irvine, CA, with offices in key markets nationwide.
To see the complete report, CLICK HERE