of those two categories represent mortgages owned or insured by government agencies. Banks and servicers are typically more moti- vated to expedite the loss mitigation and foreclosure process on mortgag- es in their own portfolios or owned by private investors. None of the 1.1 million seriously delinquent mortgages are pro- tected by the blanket foreclosure moratorium on government-backed loans that was implemented in April 2020, in the immediate wake of the pandemic. That blanket morato- rium expired July 31, 2021. It was replaced in part by a temporary rule restricting many foreclosures from the Consumer Financial Protection Bureau (CFPB), but that temporary rule expired Dec. 31, 2021. FORECLOSURE FORECAST FRAMEWORK The historical rate of annual fore- closure auctions as a percentage of seriously delinquent mortgages at the beginning of each year provides a framework from which to estimate how many of the 1.1 million seriously delinquent mortgages will end up at foreclosure sale in 2022. Between 2005 and 2019, annual foreclosure auction volume repre- sented 27% of the January seriously delinquent mortgage volume, on average. In 2019 the rate was 25%. Applying that 25% to the 1.1 million seriously delinquent number results in about 272,000 completed foreclo- sures in 2022, up from the all-time low of 75,000 in 2021 to the highest level since 2017. Given all the energy and resources still being directed at foreclosure prevention—and rightly so—it’s likely the seriously delinquent-to-foreclo- sure auction roll rate will be closer to 13% in 2022. That 13% is the average of the roll rate from 2019
2022 FORECLOSURE FORECAST
Completed Foreclosures for Year
SDQ in January
6 MM
1200K
1000K
5 MM
800K
4 MM
600K
3 MM
400K
2 MM
200K
1 MM
K
MM
SOURCE: BLACK KNIGHT, ATTOM DATA SOLUTIONS
SMALLER BUT DEEPER POOL OF SERIOUSLY DEL INQUENT
90+ days DQ Average days del inquent for 90+
Foreclosure Inventory Average Days Del inquent for FC
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
SOURCE: BLACK KNIGHT
to 2021, right before and during the pandemic. This would result in about 139,000 completed foreclosure auc- tions in 2022, up 84% from the 2021 record low, but still the third-lowest total going back to 2005—lower only than 2020 and 2021. •
Daren Blomquist is vice president of market economics at Auction.com. In this role, Blomquist analyzes and forecasts complex macro and
microeconomic data trends within the marketplace and industry to provide value to both buyers and sellers using the Auction.com platform.
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