Foreclosure starts are up 23% from a year ago. Active foreclosure inventory is up 43%. And completed foreclosure sales are still running at just 59% of pre-pandemic volume.

Foreclosure starts are up 23% from a year ago. Active foreclosure inventory is up 43%.
And completed foreclosure sales are still running at just 59% of pre-pandemic volume.

Read those three numbers together, because that's the whole story.
New data out this week from the ICE Mortgage Monitor shows something that looks contradictory until you understand the pipeline. Delinquencies are actually improving. The national rate fell to 3.39% in July. Serious delinquency has dropped five months in a row. New defaults are down 4% year over year, and FHA defaults are down 13%. Cures climbed 12% to 464,000, the highest since March.
So why are foreclosures climbing?
Because those measure two different points in the process. Falling delinquency means fewer new borrowers going bad. Rising foreclosure means the files that went bad in 2023 and 2024 have finally run out of runway after two or three rounds of forbearance and modification. The back end is clearing old inventory, not new.
Here's what that means for you: the volume hitting the market over the next several quarters is already baked. It was delinquent a year ago. This isn't a forecast, it's a queue. And with completions at 59% of normal on an inventory up 43%, that backlog does not clear in two quarters.
Let me be clear about what this is not. This is not 2008. Delinquency is below pre-pandemic levels. Mortgage holder equity just hit a record $18 trillion. Underwriting since 2010 looks nothing like 2006. What we have is a concentrated pocket of distress moving through the system, and 813,000 borrowers underwater, up 44% year over year, mostly FHA and VA buyers from 2022 through 2025.

Every one of those files needs a BPO, a valuation, an occupancy check, and an agent who knows how to handle the disposition.
The asset managers staffing up for this are picking their broker panels right now. Certification and panel applications take months. The agents who built default practices in 2009 and 2010 were the ones who had already done the training before the volume showed up.

Does your team have a default division?
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