REO INSIDER

This month, REOX welcomed Labrescia Dawson, President & CEO of Dawson’s Management, and Marcia Toms, the firm’s Program Manager, to the REOX Webinar Series for a detailed discussion on how agents and brokers can work effectively within USDA Rural Development’s REO programs.

As a national vendor under the USDA’s National Default Management Services (NDMS) contract, Dawson’s Management provided members with a clear view of how USDA assets move from foreclosure to final sale—and how agents can stand out in the process.

Understanding the USDA REO Flow

Dawson’s oversees the full default-to-REO process—including foreclosure, bankruptcy, eviction, appraisal, preservation, and disposition. In short, Dawson’s manages properties “from cradle to grave.”

For agents, that means assignments often begin before a property is ready for listing. Quick occupancy checks, accurate condition reports, and consistent monthly inspections are critical to keeping the process moving smoothly.

What Dawson’s Looks for in Agents

Success with Dawson’s—and with USDA assets overall—comes down to reliability, professionalism, and communication.

• Be responsive. Agents are expected to accept or decline assignments within 48 hours and to remain reachable throughout the process.
• Be proactive. Reporting issues early—such as occupancy, access, or title complications—builds trust and efficiency.
• Be thorough. Timely inspections, accurate valuations, and well-organized submissions help maintain consistent performance scores.

The Details that Matter

Dawson’s shared several practical reminders to help agents avoid common pitfalls:

• Broker Price Opinions (BPOs):
  
  • Submit the initial BPO within five days, and update every 60 days while listed.
  • Use commentary to explain market conditions or justify adjustments—context matters as much as the number.
• Photos and Field Work:
  
  • Inspection photos should be date-stamped and document the property thoroughly.
  • Marketing photos should be high-quality and clean, without date stamps, clutter, or orientation errors.
  • Seasonal refreshes are encouraged to keep listings accurate and appealing.
• Platform and Paperwork:
  
  • All assignments flow through Equator—no zip code purchases are required.
  • Licensing and E&O insurance ($1M minimum) must remain current in your profile.
  • Contracts and Master Listing Agreements (MLAs) are handled via DocuSign, not state forms. Ensure unique emails for each signer to avoid delays.

Performance & Professionalism

Agent performance is tracked through several key metrics:

• On-time inspections and task completion
• Accuracy and timeliness of BPOs
• Days on market and days to close
• Clear communication with asset specialists

Agents who stay responsive and engaged often retain listings beyond the standard 60-day window—and are prioritized for future assignments.

Opportunity Ahead

While Dawson’s activity is currently strongest in Texas and Georgia, additional states will come online as USDA transitions more assets to REO. Remote or rural markets like Alaska and Wyoming also present opportunities for agents willing to expand their coverage or obtain additional licenses.

How to Get Started

• Visit dawsonsmanagement.com → USDA NDMS Vendor Sign-Up → Broker/Agent Sign-Up (redirects to Equator).
• Keep your Equator profile current—especially your contact email, license, and E&O information.
• Join Dawson’s private Facebook group to hear about new state opportunities, certification sessions, and training events first.

Final Word

Dawson’s message was consistent and encouraging: success in USDA REO is about professionalism, communication, and follow-through.

Agents who stay responsive, meet deadlines, and provide quality documentation will not only secure assignments—but build long-term partnerships that grow with the market.

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Artificial Intelligence is making waves in nearly every industry, and real estate is no exception. A new study tested whether Large Language Models (LLMs)—the same AI technology powering tools like ChatGPT—could perform real estate valuations.

The verdict? While not yet a 1-for-1 replacement for human expertise, AI is rapidly developing in its use cases, accuracy in modeling, and platform integrations.‍

Researchers found LLMs could generate valuation estimates that, in some cases, came close to professional appraisals. However, performance varied widely depending on data quality, property type, and the complexity of local market factors.

‍Key Takeaways for REO Professionals

• Speed vs. Precision: LLMs can process and summarize large datasets quickly but may miss hyper-local nuances that drive value.
• Data Dependency: The accuracy of AI valuations hinges on the quality and completeness of the underlying property data. While this is improving, a lot of filtering is still required to offset gaps in intel.
• Augmentation, Not Replacement: In the near term, LLMs are best used to support—not replace—human appraisers, especially for unique or distressed properties where condition and neighborhood insight matter most.

Expert AI Insights this Fall‍

The reality is that, as LLMs continue to evolve, understanding AI tools and utilizations will soon be mission-critical to continued success. This is exactly why REOX has aligned with the Housing Intelligence Expo this November, with exclusive expert insights solely for our members. For more information and to register, visit TheHousingIntelligence.com.

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The second quarter of 2025 brought a shake-up in the non-agency mortgage-backed securities (MBS) servicing race. After slipping behind Select Portfolio Servicing (SPS) earlier in the year, Newrez/Shellpoint rebounded to the top spot, handling servicing on $9.47 billion in non-agency MBS issuance—a 36.1% jump from Q1.

In total, the quarter saw $30.29 billion in non-agency MBS issued, up 20.5% from Q1. That figure includes seasoned mortgages and underscores a broader market resurgence in securitization activity.

SPS also posted gains, servicing $8.34 billion in new non-agency MBS, an 11.4% increase from the prior quarter. Both servicers represent a mix of issuers and continue to hold strong market positions.

What This Signals for REO Professionals

While headline competition centers on Newrez and SPS, the real takeaway for REO insiders is the growth trajectory in non-agency MBS issuance. Rising issuance can ultimately translate into:

• More Complex Portfolios: Non-agency pools often carry unique loan types and credit profiles, which may result in different default and resolution patterns compared to agency-backed loans.
• Future Distressed Supply: As issuance ramps, the performance of these assets will shape future pipelines of non-agency REOs, particularly if economic pressures test borrower resiliency.
• Servicer Relationships Matter: Both Newrez and SPS are major players. Building visibility with these servicers could position members for assignments if non-agency distress surfaces more meaningfully in coming quarters.

The Takeaway

Servicing leadership shifts may grab the headlines, but for REO professionals, the story is about momentum.

A 20% quarterly surge in non-agency issuance points to growing activity in a corner of the market that, historically, has been more volatile. The professionals who recognize where today’s securitizations could become tomorrow’s opportunities will be best prepared to capture value when those assets cycle into REO.

This November, the Housing Intelligence Expo is set to inform and equip leaders for the future of housing finance—including an entire day of expert-led sessions centered around REO.

REOX members are invited to join fellow leaders, servicers, asset managers for this uniquely designed inaugural conference. From industry-wide updates and REO Next, to the member-exclusive REOX Connect, REOX Bash, and more, attendees will engage in a highly curated experience designed to equip them with the strategies needed to thrive in an evolving REO market.

Featured REO Topics

Attendees will engage with experts on critical topics, including:

• The Shift in Default Markets | Macro trends in foreclosure, asset acquisition, and FHA/VA shifts—plus a look at pipeline expectations and field readiness.
• The Real-Time REO Playbook | How asset managers are redefining speed, compliance, and neighborhood preservation in 2025.
• GSE & Institutional Buyers Outlook | Investor appetite, affordable housing mandates, and institutional acquisition trends.
• AI & the Future of REO | How smarter valuations, faster turns, and AI tools are transforming operations while enhancing—not replacing—agent expertise.
• Servicer + Agent Synergy in 2026 | New expectations for agent responsiveness, digital compliance portals, escalation workflows, and property condition metrics.
• REOX Advisory Council Insights | Candid perspectives on compliance, AI, vendor standards, and what’s next in asset resolution and pre-foreclosure.
• The Road Ahead | Rising delinquencies, fragmented opportunities, and the compliance challenges shaping REO success.

Members-Only Benefits

• REOX members receive exclusive access, including:
• REOX Connect – Private expert-driven summit with servicers and asset managers
• The REOX Bash – Continued connections in an elevated, celebratory setting
• Exclusive Curriculum – members-only sessions not available anywhere else
• Lowest Rate – Unlock this special rate solely for REOX members

Be Part of the Moment

Act now to meet with decision makers, gain insider knowledge, and prepare for the shifts ahead. Secure your spot today at the fall’s must-attend REO conference.

For more information and to register, visit TheHousingIntelligence.com.

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Foreclosure activity is climbing again across the U.S., signaling increased pressure on homeowners grappling with rising living and ownership costs. While overall filings remain below pre-pandemic levels, recent data points to a steady and sustained uptick—creating new potential opportunities in REO.

Foreclosures Rising for Six Straight Months

According to ATTOM, foreclosure filings have now increased year-over-year for six consecutive months, up 18% from the same period in 2024. Roughly 188,000 properties received foreclosure filings through the first half of 2025, putting the nation on track to surpass the 322,000 total recorded in 2024.

The growth is broad-based, driven by households stretched thin by inflation and rising costs—from mortgage payments to insurance, utilities, and property taxes.

The Cost of Homeownership Keeps Climbing

Even homeowners current on their loans are feeling the strain of higher holding costs. Data from ICE Mortgage Technology shows that the average property insurance premium for single-family homes with a mortgage is now $2,370 annually—up nearly 70% from five years ago.

Other costs are adding up, too:

• Property taxes are climbing across many states.
• Utility and repair costs continue to rise.
• Interest rates remain elevated, making it particularly challenging for homeowners with adjustable-rate mortgages (ARMs) that are now entering reset periods.

The Economic Pressure Behind Defaults

Roughly 94% of mortgage defaults occur after an income disruption, according to The Urban Institute. That means job loss, medical expenses, or even modest financial setbacks can quickly push already tight budgets into delinquency.

With job growth slowing and consumer debt at record highs, experts caution that delinquency rates could continue to rise through the remainder of 2025—especially for lower-income households and those in high-cost markets.

What It Means for REO Professionals

While the current pace of foreclosures is not indicative of a crisis, the steady upward trend suggests a growing pool of potential REO inventory in the months ahead.

For agents and brokers in the REO space, this shift underscores three key points:

1. Timelines Could Tighten: As filings increase, servicers will seek experienced agents who can efficiently and compliantly move assets.
2. Regional Monitoring Matters: Rising costs affect markets differently; tracking local filings and delinquency data will be critical for anticipating where inventory may surface.
3. Preparation Equals Opportunity: Building and maintaining relationships with servicers now ensures visibility when assets transition into REO.

The trendline is clear: ownership costs are testing homeowner resilience, and the early signs of stress are beginning to surface. For REO professionals, this is a call to stay informed, prepared, and positioned to capitalize on the opportunities that follow market shifts.

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Sources: CBS News, ATTOM, The Urban Institute, ICE Mortgage Technology

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Foreclosure activity is climbing in 2025, but this isn’t a crisis-driven flood. Instead, it’s shaping up as a steady stream of new REO opportunities—rewarding agents and brokers who are ready, responsive, and positioned to act quickly. Pandemic-era protections and historically low interest rates delayed much of the distress, but as forbearance programs fade and economic pressures build, those cases are now surfacing.

The Numbers Behind the Shift

• Filings Rising: ATTOM’s mid-year 2025 report shows a 5.8% increase in filings compared to the first half of 2024.
• REOs Accelerating: Completed repossessions are up 12% year-over-year, with May 2025 marking a 34% monthly jump—the fastest climb in years.
• Timelines Shortening: The average foreclosure now takes 645 days, down 21% from last year. That means assets are moving faster through the system and hitting the REO pipeline sooner.

Why This Cycle Looks Different

• Government-Backed Loans Dominate: With 90%+ of mortgages tied to FHA, VA, USDA, or GSE programs, loss mitigation rules shape how and when properties hit the market—but they don’t stop the flow.
• Equity Shifts the Path, Not the Pressure: Strong homeowner equity gives borrowers options, but distress still surfaces. Instead of preventing REO entirely, equity often delays or redirects the path, creating different timing for assignments.
• Alternative Dispositions Create Local Openings: Programs like HUD’s CWCOT auctions and Fannie Mae’s note sales move some inventory upstream. Yet unsold assets still find their way into local REO channels—opportunities for those watching closely.

Where to Watch: Regional Surges

Not all markets are moving at the same pace. Alaska, Rhode Island, Wyoming, Utah, and Colorado are showing the sharpest increases in REOs. For agents and investors, these regional breakouts highlight where supply pipelines are shifting upward fastest—and where being prepared matters most.

What It Means for REO Professionals

• Act Faster: Shorter timelines mean competition ramps up quickly. The professionals who are responsive and compliant will win assignments first.
• Track Regional Trends: Growth isn’t uniform. Targeting the right markets positions you for the most activity.
• Prepare for Momentum: With REOs climbing year-over-year and economic headwinds persisting, the second half of 2025 is poised to bring a broader wave of opportunities.

Looking Ahead

The story of post-pandemic foreclosures isn’t about another 2008. It’s about a market steadily building inventory, creating new lanes of opportunity for those who can adapt. The agents, brokers, and investors who stay ready—fast, compliant, and regionally focused—will be the ones to benefit as the next wave of assignments comes through.

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The nation’s foreclosure pipeline is beginning to move faster—and in some markets, it’s getting bigger. ATTOM’s mid-year numbers show a 5.8% year-over-year increase in total foreclosure filings for the first half of 2025.

While still far below historical peaks, the uptick is paired with a more telling trend: it’s taking less time for properties to move from default to completion.

The average foreclosure now takes 645 days, down 21% from last year’s 816-day average. For REO professionals, that acceleration means assets could be hitting the market sooner after distress begins—changing both the volume and pace of assignments.

‍REO Activity Leading the Increase

The most significant jump came from completed repossessions (REOs), which rose 12% from the first half of 2024. Foreclosure starts also ticked up 7%, suggesting the pipeline is filling from both ends.

‍Markets leading the climb in filings include:

• Alaska (+55% YoY)
• Rhode Island (+50%)
• Wyoming (+48%)
• Utah (+46%)
• Colorado (+41%)

These states, along with a handful of others showing double-digit increases, could see more distressed inventory in circulation before the year’s end.

‍What the Numbers Don’t Show—Yet

National totals remain tempered by strong homeowner equity and continued loss mitigation efforts, but not every market is insulated. In some regions, price softening, rising property taxes, and higher insurance costs are pushing certain homeowners closer to distress.

For agents and brokers in REO, now is the time to:

• Track local timelines — Faster foreclosure completions mean less lead time between default and listing.
• Strengthen servicer relationships — States with rising filings could become near-term sources of opportunity.
• Stay market-aware — Even modest changes in equity or employment trends can create localized surges in filings.

The Bottom Line

The latest data points to a market where foreclosure activity is gradually expanding and moving more quickly. For those prepared to move with it, the second half of 2025 could bring a mix of volume growth and shorter assignment cycles.

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Halfway through 2025, and the housing market remains in balance—for now. The rapid price gains and frenzied competition of recent years have cooled, but this isn’t a market in retreat. Instead, experts are calling for a steadier second half of the year, marked by moderate price growth and stubbornly stable mortgage rates.

Prices: Cooling, Not Crashing

Some buyers have been waiting for a price drop, but most experts say that’s not on the horizon. The National Association of Home Builders projects 1.5%–2% home price growth for 2025, on average, with only modest dips—around 3.5%—in select markets.

Nationwide, prices are still up 55% over the past five years according to the FHFA, reinforcing housing’s role as a long-term wealth builder. While price appreciation is slowing from pandemic highs, the data points to normalization, not a correction.

Mortgage Rates: Lower, But Not Low

Many buyers are also holding out for a rate drop—but they may be waiting longer than they think. Yahoo Finance and other analysts expect rates to stay in the mid-6% range through year-end. That means buyers waiting for a return to sub-6% may face higher prices when they re-enter the market.

The message from experts: focus on overall affordability and lock in when the payment fits, rather than trying to time the market perfectly.

What This Means for REO Professionals

• Moderating Price Growth Shapes Market Dynamics:
  While rapid appreciation has slowed, steady values mean distressed properties entering the pipeline may carry more equity. That equity can influence workout options, sales strategies, and recovery timelines, shaping how REO professionals engage with assets.
• Regional Exceptions Matter: Some local markets will see softer prices and higher distress—opportunities for those tracking data closely.
• Affordability Will Drive Demand: As buyers get used to mid-6% rates, demand could strengthen for more affordable, distressed, or creatively financed properties.

Bottom Line

The rest of 2025 is shaping up to be a measured market, with balanced conditions in many areas and opportunity in pockets where prices soften or affordability remains a challenge.

For REO professionals, this environment rewards local expertise, adaptability, and readiness to move when conditions align.

A Sneak Peek into your Opportunities this November‍

With HI Expo debuting this fall, the REOX team is hard at work to make this inaugural event unforgettable for our members.

These carefully curated gatherings provide the perfect environment to build relationships, share ideas, and gain unprecedented access to experts and decision makers—all within a members-only setting.

Exclusive REOX opportunities at HI Expo:

• REOX Connect: You’re invited to join fellow members, servicers, asset managers, and experts at this private and inaugural summit. Featuring timely keynotes, dynamic discussions, and tableside conversations, REOX Connect is the place to gain facetime decision-makers across the industry.
• The REOX Bash: This evening social event will follow on the heels of REOX Connext, and offers another exclusive opportunity to mix, mingle, and celebrate with fellow members, speakers, and industry partners. Enjoy live music, hors d'oeuvres, and libations in an elevated atmosphere.
• Exclusive Curriculum: Designed as an off-shoot of the Transaction Resolution Pillar, REOX members will receive additional, highly relevant expert content that will be fully unavailable to non-members.

No additional work is required for you to participate in these tailored opportunities; as an REOX member, your access is included with your registration.

Attend HI Expo at the Locked in Lowest Rate

Another exclusive for REOX members, you’re invited to reserve your ticket for HI Expo at the lowest rate, beating even early bird pricing. Best of all, your rate won’t change—whether you book today or two months from now—enjoy the same exclusive discount even as prices increase for non-members.

However, to ensure your choice of accommodations at one of our partnering hotels, we do recommend registering early, as that information will be shared with registered attendees soon, allowing for early access to your choice of partnering hotel at the lowest rates.

To register and for more information, visit TheHousingIntelligence.com.

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