Q4 Update: Delinquencies, Foreclosures and REO

Industry Update
March 14, 2025

Source: CalculatedRisk Newsletter

This entire housing cycle I’ve argued that we would NOT see a surge in foreclosures that would significantly impact house prices (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.

Yesterday, CoreLogic reported the Homeowner Equity Report (HER) for the fourth quarter of 2024. Nationwide, borrower equity increased by $281.9 billion, or 1.7% year-over-year.  Past years of rapid growth have left many homeowners with a substantial accumulation of equity. This financial padding can serve as a backstop in the event of a relocation or job loss.

Quarter-over-quarter, the total number of mortgage residential properties with negative equity increased by 9.3% to 1.1 million homes or 2% of all mortgaged properties. While year-over-year, negative equity increased by 7% from 1 million homes, or 1.8% of all mortgage properties … Negative equity peaked at 26% of mortgaged residential properties in Q4 2009 based on CoreLogic equity data analysis.

With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties even with an economic downturn.

Here is some data on REOs through Q4 2024 …

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) was increased 6% YOY from $747 million in Q4 2023 to $790 million in Q4 2024. This is still historically extremely low.

Fannie Mae reported the number of REOs decreased to 5,895 at the end of Q4 2024, down 9% from 6,481 at the end of the previous quarter, and down 30% year-over-year from Q4 2023. Here is a graph of Fannie Real Estate Owned (REO).

This is very low and well below the pre-pandemic levels. REOs are a lagging indicator. REOs increase when borrowers struggle financially and have little or no equity, so they can’t sell their homes – as happened after the housing bubble. That will not happen this time.

Here is some data on delinquencies …

It is important to note that loans in forbearance are counted as delinquent in the various surveys but not reported to the credit agencies.

The percent of loans in the foreclosure process decreased year-over-year from 0.47 percent in Q4 2023 to 0.45 percent in Q4 2024 (red) and remains historically low. Loans in forbearance are mostly in the 90-day bucket at this point, and that has declined recently.

Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate decreased 9 basis points to 2.03 percent, the 60-day delinquency rate increased 3 basis points to 0.76 percent, and the 90-day delinquency bucket increased 11 basis points to 1.19 percent.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 0.45 percent, remaining unchanged from the third quarter of 2024 and 2 basis points lower than one year ago.

Both Fannie and Freddie release serious delinquency (90+ days) data monthly. Freddie Mac reported that the Single-Family serious delinquency rate in January was 0.61%, up from 0.59% December. Freddie’s rate is up year-over-year from 0.55% in January 2024, however, this is close to the pre-pandemic level of 0.60%. Freddie’s serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in January was 0.57%, up from 0.56% in December. The serious delinquency rate is up year-over-year from 0.54% in January 2024, however, this is below the pre-pandemic lows of 0.65%. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

And on foreclosures …

ICE reported that foreclosures starts and sales have increased recently, especially for VA loans, however foreclosure sales are still down year-over-year.

Foreclosure starts jumped by 30%, sales rose by 25%, and the number of active foreclosures rose by 7% in January following expiration of a recent moratorium on VA foreclosures.

While January increases in foreclosure activity are common, starts hit their highest level in 5 years, with more than 40K loans referred to foreclosure in the month.

Compared the same time last year, foreclosure starts among FHA (-2%) and conventional (-4%) loans declined, with the annual increase being solely driven by the spike in VA referrals.

Resumption of VA foreclosures – all else the same – could result in a roughly 15% increase in 2025 foreclosure referral activity compared to 2024.

January foreclosure sales rose from December following holiday moratoriums but were down from the same time last year (-5%) even with the resumption of VA foreclosure sales.

The bottom line is there will not be a huge wave of foreclosures as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time. That doesn’t mean we won’t see price declines, especially in areas with a large number of homes for sale. And if the economy weakens, and unemployment increases, we might see more distressed sales. But that is very different than the housing bust.

 

For full report, please click the source link above.

 

FEMA Fire Management Assistance Declaration – South Carolina Covington Drive Fire

FEMA Alert
March 7, 2025

FEMA has issued a Fire Management Assistance Declaration for the state of South Carolina to supplement state, tribal and local recovery efforts in areas affected by the Covington Drive Fire on March 1, 2025.  The following counties have been approved for assistance:

Public Assistance:

  • Horry

 

South Carolina Covington Drive Fire (FM-5554-SC)

List of Affected Zip Codes

 

Additional Resources

FEMA’s web site

FEMA’s Disaster Declaration Process

Safeguard Properties Industry Alerts

HUD Moratorium on Foreclosure

VA’s Policy Regarding Natural Disasters

Freddie Mac Disaster Relief Policies

Fannie Mae’s Natural Disaster Relief Policies

HUD Extends Foreclosure Relief to Californians Impacted by Los Angeles County Wildfires

Industry Update
March 6, 2025

Source: U.S. Department of Housing and Urban Development

The U.S. Department of Housing and Urban Development (HUD) is announcing a 90-day extension of its foreclosure moratorium on Federal Housing Administration (FHA)-insured single family mortgages in the areas of Los Angeles County, California, devastated by the January 2025 wildfires.

HUD Secretary Scott Turner is making this announcement while touring a disaster zone in Altadena with Fifth District of Los Angeles Supervisor Kathryn Barger. The FHA-insured single family mortgage extension underscores HUD’s commitment to supporting Americans impacted by natural disasters by providing flexibility to families in the Presidentially Declared Major Disaster Area (PDMDA).

There are over 100,000 FHA-insured mortgages in Los Angeles County PDMDA. HUD is working with mortgage servicers and others to assess the extent of properties with FHA-insured mortgages in the designated area that have been severely damaged or destroyed.

“It is heartbreaking to witness the devastation caused by the horrific wildfires in Altadena and the surrounding areas of Los Angeles County and the heavy toll of this tragedy on individuals, families and communities,” said Secretary Scott Turner. “Empowering and supporting our neighbors so they can build or rebuild their future, including when disaster strikes, is a core part of HUD’s mission and we will continue providing help during hardship.”

“HUD’s extension of the foreclosure moratorium is a lifeline for wildfire survivors in Los Angeles County who are facing immense hardship,” said Los Angeles County Supervisor Kathryn Barger. “I appreciate Secretary Turner’s leadership and commitment to ensuring that families impacted by these devastating fires have the time and support they need to recover. This critical relief will help stabilize our communities as we work together to rebuild and heal.”

The moratorium prohibits mortgage servicers from initiating or completing foreclosure actions on FHA-insured single family forward or Home Equity Conversion mortgages in the Los Angeles County PDMDA through July 7, 2025. The moratorium was originally set to expire on April 8, 2025.

Borrowers unable to make their mortgage payments should contact their mortgage servicer for assistance as soon as practical. Borrowers may also contact the FHA Resource Center at (800) CALL-FHA (1-800-877-8339; or for TTY 1-800-877-8339) for assistance.

For borrowers and renters who need immediate housing and disaster recovery assistance, HUD-certified housing counselors are prepared to provide guidance on the options that are available. To find a HUD-approved housing counseling agency, borrowers can use HUD’s online search tool or use our phone search by calling (800) 569-4287 or (202) 708-1455 (TTY).

For borrowers whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, contact an FHA-approved lender about FHA’s Section 203(h) loan program. This program provides 100 percent financing for eligible homeowners to rebuild their home or purchase a new one.

For borrowers seeking to purchase and/or repair a home that has been damaged, contact an FHA-approved lender about FHA’s Section 203(k) loan program. This program allows individuals to finance the purchase or refinance of a house, as well as the costs of repair or renovation, through a single mortgage.

 

For full report, please click the source link above.

 

Fannie and Freddie: Single Family Serious Delinquency Rates Increased in January

Industry Update
March 4, 2025

Source: CalculatedRisk Newsletter

Freddie Mac reported that the Single-Family serious delinquency rate in January was 0.61%, up from 0.59% December. Freddie’s rate is up year-over-year from 0.55% in January 2024, however, this is close to the pre-pandemic level of 0.60%.

Some of the recent increase in the 90+ day delinquency rate is probably related to the hurricanes last year.

Freddie’s serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in January was 0.57%, up from 0.56% in December. The serious delinquency rate is up year-over-year from 0.54% in January 2024, however, this is below the pre-pandemic lows of 0.65%.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

These are mortgage loans that are “three monthly payments or more past due or in foreclosure”. Mortgages in forbearance are being counted as delinquent in this monthly report but are not reported to the credit bureaus.

For Fannie, by vintage, for loans made in 2004 or earlier (1% of portfolio), 1.46% are seriously delinquent (down from 1.47% the previous month).

For loans made in 2005 through 2008 (1% of portfolio), 2.08% are seriously delinquent (unchanged from 2.08%).

For recent loans, originated in 2009 through 2023 (98% of portfolio), 0.52% are seriously delinquent (up from 0.51%). So, Fannie is still working through a handful of poor performing loans from the bubble years.

 

For full report, please click the source link above.

 

New Homes in Hazelwood Part of Partnership with City of Pittsburgh and Pittsburgh Land Bank

One Community Update
February 27, 2025

Source: www.wtae.com

City officials in Pittsburgh are working on revitalizing neighborhoods and making homes more affordable by collaborating with the Pittsburgh Land Bank. This partnership is an initiative aimed at stabilizing communities so residents can continue living in their homes while neighborhoods thrive.

Mayor Ed Gainey, along with other leaders and non-profit organizations, recently gathered in Hazelwood to discuss the importance of homeownership and the benefits of utilizing the Pittsburgh Land Bank.

The Land Bank’s mission is to transform unproductive or vacant properties into beneficial assets that can boost the city’s tax base while making homes accessible to current residents. By addressing delinquent property taxes, the program seeks to make these properties more accessible.

City Council member Bobby Wilson, who chairs the Pittsburgh Land Bank, emphasized the commitment to ensuring residents can stay in their neighborhoods and helping the city recover its properties for tax purposes.

 

For full report, please click the source link above.

With Properties in New Land Bank, Grand Rapids Eyes Affordable Housing Options

One Community Update
February 28, 2025

Source: www.woodtv.com

The newly formed Grand Rapids Land Bank is focusing on affordable housing as it looks for ways to use many vacant properties in the city.

Sarah Rainero, the economic development director for the city, says the new land bank her department oversees can make a real impact.

“The goal with the land bank is to activate housing more and better, faster housing, and this authority will allow us to be a little more nimbler at the local level,” Rainero said.

Land banks are used to manage or sell abandoned, vacant or blighted properties.

“The land bank authorities really have the autonomy to manage, acquire, move property with the goal of activating, getting these properties back on the tax rolls,” Rainero explained.

It used to be that land banks in Michigan operated mostly at the state or county level. Detroit was the only city that had its own. The state land bank oversaw properties in Grand Rapids after the county voted to disband its land bank in December 2018.

Then in 2023, state lawmakers passed legislation that allowed Grand Rapids to have its own land bank. On Feb. 1 of this year, control of 107 properties was transferred from the state land bank to the city.

Some of those properties could be used for parks or purchased as a side lot by a neighboring property.

“Some of the lots are not buildable,” Rainero said. “We have an arrangement to manage those properties — snow removal, tree maintenance.”

But the goal for most of the properties is to help meet the need for affordable housing.

“We really want to be intentional about how these properties are being activated, people that are in the neighborhoods and that want to invest in their community,” Rainero said.

 

For full report, please click the source link above.

Broome County Land Bank Announces the Launch of the New Vacant Rental Program

One Community Update
March 4, 2025

Source: www.wicz.com

The Broome County Land Bank was joined by local officials to announce the launch of the new Vacant Rental Program throughout Broome County on Tuesday, March 4.

The new program aims at rehabilitating vacant and unoccupiable rental units throughout Broome County.

In October 2024, the land bank was awarded $1.11 million in funding for this program to renovate 15-20 rental units throughout the county. Vacant rental program will assist mom-and-pop style landlords that may not have full access to financial resources, with the necessary repairs.

“So all in being perceived, this program is sort of an innovative approach to our mission that takes underutilized properties and puts them back into productive use,” Executive Director of Broome County Land Bank Jessica Haas said.

City of Binghamton Mayor Jared Kraham acknowledged the benefit the Vacant Rental Program brings to the community, saying this program is one that will help vacant units get back on the market.

“This is the type of program that will get vacant units back on the market. It’s very expensive to build new housing right now, but we have in our city a housing infrastructure of many, many, many hundreds, if not thousands of vacant units that need to be repaired, restored and put back on the market.”

 

For full report, please click the source link above.

FEMA Fire Management Assistance Declaration – Texas Duke Fire

FEMA Alert
March 5, 2025

FEMA has issued a Fire Management Assistance Declaration for the state of Texas to supplement state, tribal and local recovery efforts in areas affected by the Duke Fire on March 5, 2025.  The following counties have been approved for assistance:

Public Assistance:

  • Bexar

 

Texas Duke Fire (FM-5553-TX)

List of Affected Zip Codes

 

Additional Resources

FEMA’s web site

FEMA’s Disaster Declaration Process

Safeguard Properties Industry Alerts

HUD Moratorium on Foreclosure

VA’s Policy Regarding Natural Disasters

Freddie Mac Disaster Relief Policies

Fannie Mae’s Natural Disaster Relief Policies

FEMA Fire Management Assistance Declaration – Texas Welder Fire

FEMA Alert
March 4, 2025

FEMA has issued a Fire Management Assistance Declaration for the state of Texas to supplement state, tribal and local recovery efforts in areas affected by the Welder Fire on March 4, 2025.  The following counties have been approved for assistance:

Public Assistance:

  • San Patricio

 

Texas Welder Fire (FM-5552-TX)

List of Affected Zip Codes

 

Additional Resources

FEMA’s web site

FEMA’s Disaster Declaration Process

Safeguard Properties Industry Alerts

HUD Moratorium on Foreclosure

VA’s Policy Regarding Natural Disasters

Freddie Mac Disaster Relief Policies

Fannie Mae’s Natural Disaster Relief Policies

Fannie Mae Announces 2024 STAR Program Results

Industry Update
February 25, 2025

Source: Fannie Mae

Fannie Mae announced its 2024 Servicer Total Achievement and Rewards™ (STAR™) Program results, recognizing 29 mortgage servicers for competency, capability, and overall performance. For more than a decade, Fannie Mae’s STAR Program has awarded high-performing mortgage servicers for their loan volume and portfolio composition, and for demonstrating leading practices to improve the housing industry.

“We’re proud of this year’s top-performing STAR Program servicers who are critical partners in our mission to provide stability to borrowers based on strong servicing standards,” said Cyndi Danko, Senior Vice President and Single-Family Chief Credit Officer, Fannie Mae. “Our servicers continue to show their commitment to operational excellence while reducing credit loss – a crucial component to the overall safety and soundness of Fannie Mae’s business and the residential mortgage market.”

Since 2011, Fannie Mae’s STAR Program has enabled broad and lasting improvements across the mortgage servicing industry by promoting servicing knowledge and excellence. The program has seen sustained servicer improvement in both metric performance and operational assessment results year over year.

For the 2024 program year, mortgage servicers were evaluated for STAR Performer recognition in three categories: General Servicing, Solution Delivery, and Timeline Management based on the results of the Servicer Capability Framework and STAR Performance Scorecard.

The 2024 STAR Program recipients are:

General Servicing:

  • Associated Bank
  • Cenlar Federal Savings Bank
  • Colonial Savings
  • Fifth Third Bank, N.A.
  • Gateway First Bancorp, Inc
  • Guild Mortgage Company
  • PHH Mortgage Corporation
  • JPMorgan Chase Bank
  • M&T Bank
  • Truist Bank
  • The PNC Financial Services Group, Inc.
  • Provident Funding Associates, L.P.
  • University Bank
  • Wells Fargo & Company

Solution Delivery:

  • Flagstar Bank, National Association
  • Rocket Mortgage, LLC

Timeline Management:

  • LoanCare

General Servicing and Solution Delivery:

  • Arvest Bank
  • Bank of America, N.A.
  • BOK Financial Corporation
  • Dovenmuehle Mortgage, Inc.
  • Freedom Mortgage Corp.
  • Planet Home Lending, LLC
  • Regions Bank
  • Servbank
  • ServiceMac
  • The Huntington National Bank

General Servicing and Timeline Management:

  • NewRez, LLC

General Servicing, Solution Delivery, and Timeline Management:

  • Mr. Cooper

 

For full report, please click the source link above.

 
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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties