Foreclosure Activity Increases after Moratorium Ends
Foreclosure activity increased significantly in August after the federal foreclosure moratorium ended July 31, reported ATTOM, Irvine, Calif.
The ATTOM U.S. Foreclosure Market Report for August showed 15,838 U.S. properties with foreclosure filings–either default notices, scheduled auctions or bank repossessions–up 27 percent from July and up 60 percent from a year ago. The numbers reflect the first month since the government moratorium lifted.
The federal ban on foreclosures expired in July, but the Federal Housing Administration extended its moratorium on evictions for foreclosed borrowers and their occupants through September 30.
Rick Sharga, Executive Vice President at ATTOM subsidiary RealtyTrac, said foreclosure activity increased “as expected” as the government’s foreclosure moratorium expired, “but this doesn’t mean we should expect to see a flood of distressed properties coming to market,” he said. “We’ll continue to see foreclosure activity increase over the next three months as loans that were in default prior to the moratorium re-enter the foreclosure pipeline and states begin to catch up on months of foreclosure filings that simply haven’t been processed during the pandemic.”
But Sharga said foreclosures will likely remain below normal levels at least through the end of the year.
Nationwide, one in every 8,677 housing units had a foreclosure filing in August. States with the highest foreclosure rates included Illinois (one in every 3,848 housing units with a foreclosure filing), Nevada (one in every 4,738 housing units), New Jersey (one in every 4,868 housing units), Delaware (one in every 5,348 housing units) and Ohio (one in every 5,517 housing units).
Among the 220 metros with a population exceeding 200,000, those with the highest foreclosure rates in August included Bakersfield, Calif. (one in every 1,796 housing units with a foreclosure filing), Atlantic City, N.J. (one in every 1,886 housing units), Cleveland (one in every 2,259 housing units), Rockford, Ill. (one in every 3,037 housing units) and Las Vegas (one in every 3,718 housing units).
ATTOM reported lenders started the foreclosure process on 8,348 U.S. properties in August, up 27 percent from last month and up 49 percent from a year ago.
“While foreclosure starts increased significantly compared to last month and last year, it’s very important to keep these numbers in context,” Sharga noted. “Both last year’s and last month’s foreclosure starts were artificially low due to the government’s moratorium. But in August of 2019, the last year we had ‘normal’ foreclosure activity, there were almost 28,000 foreclosure starts–over three times more than this year.”
States with the most foreclosure starts in August included California (1,240 foreclosure starts), Texas (1,060 foreclosure starts), Florida (643 foreclosure starts), Illinois (506 foreclosure starts) and New York (479 foreclosure starts).
Foreclosure completion numbers increased across the board, the report said. Lenders repossessed 2,474 U.S. properties through completed foreclosures (REOs) in August, up 2 percent from July and up 22 percent from last year.
States with at least 100 REOs in August that saw the greatest monthly increase included New York (up 136 percent), Michigan (up 62 percent), Illinois (up 24 percent), Florida (up 19 percent) and Texas (up 13 percent).
Major metros with the greatest number of REOs in August included Chicago (177 REOs), New York (84 REOs), Detroit (78 REOs), Baltimore (58 REOs) and Tampa (43 REOs)
