Every market cycle rewards the Market Centers that prepared early. Right now, default activity is climbing, banks and servicers are looking for reliable local agents, and more homeowners are falling behind on their payments.
The question for Team Leaders and Operating Principals is simple: does your Market Center have a default division? If not, you may be missing an increasing market, and the agents who want to work it may go somewhere that offers one.
What the data says right now
- Completed foreclosures are up sharply. ATTOM counted 5,794 REOs nationwide in August 2026, up 42% from a year earlier. Foreclosure starts were up 7%.
- The volume is concentrated. Texas, California, North Carolina, Arizona and Alabama led in REOs. Florida, Texas and California led in foreclosure starts.
- FHA borrowers are under the most stress. The MBA’s second-quarter 2026 survey put the FHA delinquency rate at 11.79%, against 4.37% for all loans.
- Foreclosure inventory reached a six-year high in the first quarter of 2026, according to Fitch.
This is not 2008. Most homeowners still have equity, and conventional loans are performing well. But the default business is growing again, and it rewards agents who already know how to work it.
Why a default division matters for a Market Center
- Recruiting. Agents with REO, short sale, BPO and investor experience look for a home where that work is supported. A default division gives them a reason to join.
- Retention. When traditional sales slow, a default division keeps productive agents busy instead of watching them leave the business or the brokerage.
- New business. Banks, servicers, asset managers and investors need local agents they can trust. A trained team opens the door to listings, BPOs and referrals.
- Community. Homeowners in default need calm, knowledgeable help. Your agents can be the ones who explain their options before it is too late.
The Market Centers that build this before conditions force them to react will be the ones banks, investors and homeowners call first.
Three ways to add a default division
Every Market Center is different, so KW Default Solutions works with you the way that fits.
- We train you to build it. Training for your agents and leadership on REO, short sales, BPOs, auctions and homeowner default work. Your team learns the business and runs it.
- We build it for you. We help you set up the division: the structure, the training path, the systems and the agents to staff it.
- We build it and run it with you. Connect your Market Center to the KW Default Solutions network, and we run the default business alongside you while your agents work the files.
Whichever path you choose, the approach is the same: Learn. Refine. Execute. Expand.
What a default division covers
- REO listings for banks, servicers and asset managers
- Short sales for homeowners who owe more than the home is worth
- BPOs and property inspections
- Online auctions and dual-path marketing through KW Home Auctions and Hubzu
- Homeowner default outreach for borrowers who are behind on payments and want to understand their options
- Investor acquisitions and dispositions
KW Default Solutions supports agents with training and certifications, including REO Buyer Pro, Auction Agent, REO Pro Listing Agent and Short Sale Pro Listing Agent, plus ongoing education like Coffee with Joe Q&A sessions.
Stay ahead of the market
Don’t compete. Change the game. Make sure your Market Center is ahead of the market, not reacting to it. Schedule a conversation with Joe Iuliucci to talk about your market and which path fits your office, or join the KW Default Solutions community.
Let’s connect.
We train you, we build it for you, or we build it and run it with you. Make sure your Market Center is ahead of the market.
Talk With KW Default Solutions