Brokers are staying calm amid reports of rising financial stress
Foreclosure rates are surging across the US, climbing to a months-long high in October as a growing number of homeowners struggle with high mortgage costs and soaring prices elsewhere.
Property and real estate data firm ATTOM said that last month saw 36,766 foreclosures across the country, a jump of nearly 20% compared with the same time last year, amid rising fears about the stability of the housing market with more borrowers falling behind.
But while that’s a trend to watch, the mortgage industry is taking a calm approach to reports of rising delinquencies.
That’s because while foreclosure filings have moved higher in recent years, those big increases are from the historic lows of the COVID-19 pandemic, when delinquencies plummeted sharply.
Foreclosures still low compared with pre-COVID years
Back in May 2020, foreclosure filings across the US totaled just 8,767, according to ATTOM. But in March of that year, at the onset of the pandemic, there were 46,800 foreclosures – well above their current levels.
And in 2018, they were even higher: that year, foreclosures peaked at 75,107 in June, more than double the rate recorded last month.
Amir Nurani (pictured top), broker-owner at the California-based Left Coast Leaders, told Mortgage Professional America the fact that delinquencies are still hovering below historical norms means there’s no reason to panic, describing the recent increase as “hyperbolized”.
That’s not to discount the stress many homeowners are feeling. “We have pain in the labor market. You’re seeing layoffs increase, you’re seeing job losses happening,” Nurani said. “You’re hearing down the grapevine that the ability to find a job has been impacted adversely.”
Labor market stress is often a warning sign that the housing market could be in trouble – but the US posted a surprisingly strong report for September, adding 119,000 jobs and far outpacing analyst expectations.
Still, Nurani cautioned against reading too much into that – particularly as monthly figures are often prone to large upward or downward revisions in the following months.
Cash-out refinances: a symbol of growing non-mortgage stress?
A jump in cash-out refinances – loans that replace an existing mortgage, allowing homeowners to tap into the difference in cash – might be seen as an indicator of early pain and higher overall consumer debt.
That’s suitable only for specific situations, and can easily backfire if used only to plug short-term holes. But it could work if, for instance, unsecured debts carry very high rates, the new mortgage terms are sustainable, and borrowers have the income and discipline to avoid running up the old debts again.
Anecdotally, Nurani said he’s seen an uptick in those types of refinances because borrowers often turn to those options and resort to equity to get out of a troublesome financial situation.
Redfin economist Asad Khan highlights a growing disconnect: more homes listed, yet prices climbed as sellers pulled properties rather than accept lower offers, reshaping supply and pricing.https://t.co/BQIMLfQSKD
— Mortgage Professional America Magazine (@MPAMagazineUS) November 27, 2025
“It doesn’t surprise me that we’re seeing foreclosures tick up because not everybody is in a position where they have the equity to extract to create some relief,” he said. “Not everybody is in a position where that’s the solution that gets them out of the pain.”
But a significant number of Americans are in a strong equity position, having spent years paying down their mortgage and having seen property values increase dramatically over the past decade – notwithstanding a recent slide across many markets.
“If you look at home prices from 2020 and 2021 to now, they’re considerably higher across the board in every single market,” Nurani said. “If you bought a home in 2023 or 2024, you might be underwater right now as the market softened – but most of the homes that we’re talking about on the market are sitting with record amounts of equity.
“Those homes aren’t going to go into foreclosure. Those individuals are going to sell those homes before they let the house go. So when you see foreclosures, it’s because selling really isn’t an option and extracting equity to relieve pain isn’t an option. Foreclosure ends up being the last resort.”
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