🚨 Foreclosures Up 25%, REO Up 41%

Banks Can't Sell Fast Enough—Foreclosure Glut Favors Cash Buyers

Foreclosure filings just jumped 25% year over year in Q3, and September alone saw a 17% spike that proves mortgage stress is finally breaking through the surface.

All that distressed inventory is flooding into the market through auctions and bank seizures, and it’s pushing prices down fast enough to flip the script entirely in favor of buyers.

But here’s the kicker: banks are now stuck holding 41% more foreclosed properties than last year because they simply can’t move them quickly enough.

The supply is overwhelming their ability to sell, which means these properties are just sitting there, getting staler by the day and forcing even deeper discounts.

Texas, Missouri, and Colorado are leading the charge with foreclosure spikes of 63%, 61%, and 51% respectively, creating massive opportunity zones for anyone paying attention.

In this edition of the AltReports:

📉 Foreclosure filings explode 25% YoY as mortgage stress bubbles over

🏦 Bank-owned homes surge 41% as lenders can’t sell fast enough

🏛️ Government shutdown freezes SBA, HUD, Fannie and Freddie CRE lending

🔄 CRE loan modifications hit crisis-era highs as debt crumbles

💸 Debt costs crush mediocre CRE while trophy assets stay golden

🏠 Housing sales slump leaves piles of stale listings nationwide

📊 Mortgage meltdown sparks distress bonanza for cash buyers

Video of the Week: It’s Over: Record Home Sale Cancellations Shock the Market

Chart of the Week: Total Value of Modified CRE Loans Held by U.S. Banks

Podcast of the Week: ‘Strongest Buyer’s Market’ In A Decade: Redfin CEO On Falling Home Prices

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Foreclosure Filings Explode, Deals Incoming

Foreclosure filings are surging, with Q3 numbers up 25% year over year and September up 17%, proving mortgage stress is finally bubbling over.

That flood of bank-owned homes and auction inventory is pushing prices lower and giving buyers the upper hand.

💡 Investor Takeaway: Target fastest-growing foreclosure markets: Texas (up 63% YoY), Missouri (up 61%), and Colorado (up 51%)

Bank-Owned Homes Surge 41% as Foreclosures Overwhelm Lenders

Banks are stuck holding 41% more bank-owned homes this year because foreclosures are exploding and they can’t sell fast enough.

That flood of distressed properties is driving prices down and handing a buyer’s market to anyone with cash.

💡 Investor Takeaway: Focus on homes listed 60+ days with multiple price cuts in $150-400K range,

Government Shutdown Halts CRE Loans and Lights a Fire Under Distressed Deals

The government shutdown just yanked the plug on SBA, HUD, Fannie Mae and Freddie Mac lending, freezing the lifeblood of commercial real estate financing.

Lenders are slamming on the brakes, deals are stalling and borrowing costs are about to spike as risk creeps back into the market.

💡 Investor Takeaway: Look for multifamily and affordable housing deals that lost agency financing

CRE Loan Mods Hit Crisis-Era Highs as Debt Crumbles

Borrowers are begging for loan rewrites as CRE debt buckles under higher rates and rising vacancies.

The St. Louis Fed data shows a sharp jump in modifications, meaning banks are scrambling to dodge mass defaults.

💡 Investor Takeaway: Target modified loans from regional banks trading at 60-75 cents on dollar

Debt Costs Crush Mediocre CRE While Trophy Assets Stay Golden

Lenders have slammed shut their wallets and surging interest costs are tanking values on anything that isn’t top-tier.

Prime office, multifamily and industrial with blue-chip sponsors still command cheap capital, so they’ll keep winning while the rest get slaughtered.

💡 Investor Takeaway: Focus on Class B/C office and retail properties with loan maturities in Q4 2025-Q1 2026.

Housing sales slump leaves piles of stale listings

Existing home sales crashed again in September, leaving inventory bulging and sellers desperate.

Buyers are ghosting showings as mortgage rates stay high, so more price cuts are popping up everywhere.

💡 Investor Takeaway: Target single-family homes with 90+ days on market and 10%+ price reductions in inventory-heavy markets like Austin, Boise, Nashville

Mortgage Meltdown Sparks Distress Bonanza

Mortgage demand has flatlined because sky-high rates and inflated prices have locked out buyers and stalled sales.

Desperate sellers are slashing prices and flooding the market, turning once-hot neighborhoods into distress traps.

💡 Investor Takeaway: Buy performing note portfolios at 85-90 cents on dollar from small portfolio lenders exiting the market.