Rising foreclosure auction volume in 2026 is being driven largely by recent vintage loans with little or no equity. This shift in the mix of distressed loans, combined with a sluggish retail housing market in many parts of the country, is changing the loss severity calculus for mortgage servicers and government policymakers, prompting lower pricing at foreclosure and bank-owned auctions.
The good news is that in a transparent marketplace, these pricing adjustments are helping spur more demand and competition from auction buyers. That is helping the market find equilibrium and minimize loss severity for servicers and government agencies.
Foreclosure auction volume in the second quarter of 2026 increased 23% from a year ago, matching a six-ye...