ATTOM: Foreclosure Activity at Historic Lows as Moratorium Stalls Filings

ATTOM Data Solutions, Irvine, Calif., reported just 27,016 properties with foreclosure filings in the third quarter, down by 12 percent from the previous quarter and down by 81 percent from a year ago to the lowest level since it began tracking quarterly filings in 2008.

However, the low numbers come with a caveat—the numbers are low because of nationwide moratoria on foreclosure and forbearance initiated under the CARES Act. The worst, said Rick Sharga, Executive Vice President of ATTOM parent company RealtyTrack, is yet to come.

“Foreclosure activity has, for all intents and purposes, ground to a halt due to moratoria put in place by the federal, state and local governments and the mortgage forbearance program initiated by the CARES Act,” Sharga said. “But it’s important to remember that the numbers we’re seeing today are artificially low, even as the number of seriously delinquent loans continues to increase, and that we’ll see a significant–and probably quite sudden – burst of foreclosure activity once these various government programs expire.”

The report noted 9,707 U.S. properties with foreclosure filings in September, down 2 percent from the previous month and down 80 percent from a year ago.

Other report findings:

–Lenders started the foreclosure process on 15,129 properties in the third quarter, down by 15 percent from the previous quarter and down by 81 percent from a year ago — the 21st consecutive quarter with a year-over-year decrease in foreclosure starts.

–States that posted greatest year-over-year decreases in foreclosure starts in the third quarter included Pennsylvania (down 95 percent); Wisconsin (down 93 percent); Washington (down 93 percent); Maryland (down 91 percent); and Colorado (down 90 percent). Among 220 metropolitan statistical areas analyzed in the report, decreases were strongest in Washington, D.C. (down 91 percent); Philadelphia (down 90 percent); Cleveland, Ohio (down 89 percent); Denver (down 89 percent); and Baltimore (down 88 percent).

–One in every 5,048 properties had a foreclosure filing in the third quarter. States with the highest foreclosure rates in Q3  were South Carolina (one in every 2,339 housing units); Illinois (one in every 3,031); New Mexico (one in every 3,079); New Jersey (one in every 3,314); and Delaware (one in every 3,482). Among metros, those with the highest foreclosure rates in Q3 were McAllen-Edinburg, Texas (one in every 1,134 housing units); Davenport, Iowa (one in every 1,346); Shreveport, La. (one in every 1,640); Columbia, S.C. (one in every 1,664); and Rockford, Ill. (one in every 1,696).

–Lenders repossessed 6,076 U.S. properties through foreclosure in Q3, down 22 percent from the previous quarter and down 82 percent from a year ago to the lowest level since ATTOM began tracking.

“We’ll certainly see more repossessions by lenders once the foreclosure moratoria have ended, but maybe not as many as people might expect” Sharga said. “Given the record amount of homeowner equity – over $6.5 trillion – it seems likely that many homeowners in financial distress will opt to take advantage of strong demand among homebuyers and sell their property rather than risk losing it to a foreclosure auction.”

–States with the longest average foreclosure timelines for homes foreclosed in Q3  were Hawaii (1,741 days); New Jersey (1,527 days); New York (1,423 days); Florida (1,230 days); and Washington (1,130 days). States with the shortest average foreclosure timelines were Virginia (180 days); Minnesota (208 days); Alaska (213 days); West Virginia (236 days); and Texas (244 days).

–In September one in every 14,049 properties had a foreclosure filing. Five thousand properties started the foreclosure process in September, down 11 percent from the previous month and down 80 percent from a year ago. Lenders completed the foreclosure process on 2,013 U.S. properties in September 2020, down 1 percent from the previous month and down 83 percent from a year ago.