AIANALYSISPODCAST
Foreclosure filings are climbing, and broker Melody Wright says the test for 2027 is who is still at the bid when distressed properties come to market.
California mortgage broker Melody Wright has foreclosure sales on her client calendar for the first time since 2020, and on a recent Podcast Alpha episode she uses that signal to mark a shift she calls the housing downturn's second leg. The first leg was about prices, she argues. The second is about the bid, and the test is not whether filings rise further but who is left at the auction when distressed properties come to market in 2027.
ATTOM's April 2026 foreclosure market report showed filings rising year over year, and HousingWire re-reported the April release. ATTOM's May 2026 report and HousingWire's May write-up put the year-over-year change at 14%. The directional read across both months is the same: filings are higher than a year ago. The exact figure depends on whether the comparison is a calendar month or a quarter.
Wright cites a 26% year-over-year rise for what she calls "April." That number matches HousingWire's read of ATTOM's Q1 2026 release, not the standalone April print, which ATTOM's own release frames at 18%. The two are not contradictory once the period is fixed; the headline number is the one that travels, and the period is the part that gets lost. Treat the 26% as Q1-to-Q1, not April-on-April.
Wright's larger claim is about what is feeding the pipeline. Filings are the lag; early-stage delinquencies are the lead. She says serious delinquencies have risen on a non-seasonal basis for four straight months in 2026, and she treats that as the more useful number because it tells her what her auction calendar will look like in nine to twelve months. The delinquency series she is pointing at is the kind ICE Mortgage Performance and the MBA National Delinquency Survey publish. The directional read she is citing is not independently verified by the artifacts in this bundle, so it should be treated as a practitioner's claim rather than a settled data point.
If the delinquency read is right, the volume question recedes and the bid takes over. Wright argues that institutional buyers, the large private SFR and REIT operators who absorbed distressed flow from 2012 to 2014, are net sellers in several of the markets she watches. Younger first-time buyers, meanwhile, are locked out by rate-and-price math that has not improved even as the headline mortgage rate has come off its peak. The composition on the bid side, in her telling, has thinned to a single class of buyer that the previous cycle did not depend on: the government-sponsored enterprises.
That is also where her forecast gets specific. Wright expects a material foreclosure-sale surge by the first quarter of 2027 and expects Fannie Mae and Freddie Mac, still in Treasury-backed conservatorship, to be the de facto buyer of last resort for the properties that do not clear to private capital. The forecast is contingent, not mechanical. GSE conservatorship is a policy choice rather than a market fact, and a change in conservatorship terms, a recapitalization, or a sharp private bid return would each break the chain. The thesis is testable on those terms: if private institutional buyers come back into the flow, the "second leg" collapses back to a normal cyclical correction.
Two items in the episode are worth keeping at arm's length. Wright attributes roughly 50,000 apartments being pulled off the New York rental market to the state's 2019 rent-stabilization law and says she will no longer originate mortgages in the city. The 50,000 figure is specific enough that an independent source is required before it can be asserted; her personal origination stance is her own. She also reads the moment through an 18.6-year land-cycle model that places the US at year 17 to 18 and implies renewed declines into 2027. The cycle is a model rather than a dataset, and it is useful as a way to organize Wright's expectations, not as a load-bearing fact.
The watch item is narrow. The next two quarters of delinquency data will tell readers whether the bid-side thesis has anything to defend. If ICE or MBA prints show early-stage delinquencies rolling over, Wright's calendar empties and the volume question is the whole story. If they keep climbing on a non-seasonal basis, the auction composition in 2027 is the question, and the answer depends on whether Fannie and Freddie are still in conservatorship when the supply arrives.