What Mortgage Delinquencies Tell Us About the Future of Foreclosures

Have you ever thought of mortgage delinquencies as a kind of barometer — a warning signal flashing before the real storm of foreclosures? It’s a bit like watching dark clouds gather on the horizon. Let’s unpack what recent data suggests, what it might mean going forward, and how homeowners can stay ahead of the curve.

📉 The Current Landscape: Delinquencies, Slight Slides, and Uneven Pressure

Mortgage delinquencies — when payments are late but not yet in full default — have been inching around modest levels lately. In Q2 2025, the delinquency rate dipped to 3.93 %, down 11 basis points from Q1. That’s just under the long-term average when historical norms are considered. 

But here’s the catch: while early-stage delinquencies (30 or 60 days) are softening, serious delinquencies (90+ days) plus foreclosures are showing upward drift. And data from ICE notes that active foreclosure inventory and foreclosure starts have also nudged higher year over year. 

What’s happening? The signs are subtle but consistent:

• Some homeowners are struggling to make up gaps after missed payments

• Cure rates (i.e. coming back to current from delinquency) are becoming less generous

• Areas with weaker job growth, rising costs, or stretched budgets are showing more pressure

So while the average borrower might currently be okay, the “weakest links” are being exposed.

🔍 Reading the Tea Leaves: What This Suggests for the Future

If the trend continues, here’s what we might see:

1. More foreclosure starts on the horizon
   Delinquencies are a prerequisite — you don’t go to foreclosure without first being behind. With serious delinquencies creeping up, more cases may cross the threshold.

2. Foreclosure volumes still likely capped
   Things won’t explode overnight. Legal constraints, lender reluctance, and moratoria (in some places) act as buffers. In fact, many forecasts see foreclosure rates remaining near pre-pandemic norms. 

3. Differentiated risk across markets and loan types
   Loans backed by government programs (FHA, VA) often carry more risk and have already shown sharper delinquency increases. Similarly, certain states or cities with weaker economies will get hit harder first.

4. Potential for longer timelines and lag effects
   Even after a delinquency is recorded, the path to foreclosure can be months or even years. The full “wave” of foreclosures may lag behind what we see in delinquencies today.

5. Intervention and mitigation will matter more than ever
   Where borrowers, lenders, or housing authorities intervene early — via modifications, payment plans, or relief programs — many potential foreclosures may be averted.

So what does it all add up to? I’d expect a gentle uptick in foreclosures over the next 12–24 months, concentrated in vulnerable segments (high cost burdens, weak local economies, riskier loan types). But I don’t expect a replay of the “Great Recession” wave — at least not yet.

💡 What Homeowners Should Do Now

• If you’re behind or struggling, reach out proactively to your lender or servicer.

• Review your mortgage statement carefully. Are you creeping into the 60- or 90-day zone? The earlier you catch it, the more options you’ll have.

• Don’t ignore it — sometimes silence is the worst strategy.

• Consider refinancing only if it truly eases your cash flow (and not just to buy time).

• If you own multiple properties or have investment exposure, monitor your local markets — some cities will feel the stress earlier.

If you’re reading this and thinking, “Wait, could I be at risk?”, let’s talk.

Book a free consultation with me — I’ll walk you through whether your mortgage is vulnerable, and we’ll map out options together.
You can also chat with me anytime if you want a quick check or just to ask a question.