The Quiet Foreclosure Trend That’s Easy to Miss

[David Litt]

I’ve been in and around real estate for over 25 years, and lately I’ve noticed something that isn’t making headlines but is happening quietly across several markets: homeowners with equity are still ending up in foreclosure.

It’s counterintuitive, right? You’d think rising home values would prevent it. But in reality, we’re seeing folks who bought in the last 5–7 years—who have plenty of equity—fall behind due to reasons like increased property taxes, insurance hikes, or short-term income disruptions.

What’s most alarming is that many of them don’t reach out for help. They wait too long because they assume equity alone protects them. Or they don’t realize how fast the legal process can move in certain states.

I've come across owners who received a Notice of Default and still weren’t sure what it meant. Or they thought they had months to “figure things out” when the foreclosure auction was only weeks away.

This isn’t meant to be alarmist—it’s a reminder that housing security isn’t just about property value. It’s about financial literacy, proactive planning, and knowing the signs when something’s off.

For those of you working with distressed properties or considering off-market acquisitions, have you noticed a similar pattern in your markets? I'd love to hear how others are interpreting this quieter shift.

[Chris Seveney]

Quote from @David Litt:

I’ve been in and around real estate for over 25 years, and lately I’ve noticed something that isn’t making headlines but is happening quietly across several markets: homeowners with equity are still ending up in foreclosure.

It’s counterintuitive, right? You’d think rising home values would prevent it. But in reality, we’re seeing folks who bought in the last 5–7 years—who have plenty of equity—fall behind due to reasons like increased property taxes, insurance hikes, or short-term income disruptions.

What’s most alarming is that many of them don’t reach out for help. They wait too long because they assume equity alone protects them. Or they don’t realize how fast the legal process can move in certain states.

I've come across owners who received a Notice of Default and still weren’t sure what it meant. Or they thought they had months to “figure things out” when the foreclosure auction was only weeks away.

This isn’t meant to be alarmist—it’s a reminder that housing security isn’t just about property value. It’s about financial literacy, proactive planning, and knowing the signs when something’s off.

For those of you working with distressed properties or considering off-market acquisitions, have you noticed a similar pattern in your markets? I'd love to hear how others are interpreting this quieter shift.

 we are note investors and buy defaulted loans, I would say almost our entire portfolio of defaulted loans have equity in them. people are equity rich and cash poor. Many file bankruptcy but then cannot afford those payments. You are correct many ask for help to late and those that do typically are dealing with the larger servicers who may or may not be getting responses in a timely fashion to come to a resolution