2020 Foreclosure Activity at 16-Year Low

ATTOM Data Solutions, Irvine, Calif., said U.S. foreclosure filings fell to just over 200,000 in 2020, the lowest level since it began tracking such data in 2005.

The company’s Year-End 2020 U.S. Foreclosure Market Report said default notices, scheduled auctions and bank repossessions were reported on 214,323 U.S. properties in 2020, down 57 percent from 2019 and down 93 percent from a peak of nearly 2.9 million in 2010, to the lowest level since tracking began in 2005. They represented 0.16 percent of all U.S. housing units, down from 0.36 percent in 2019 and down from a peak of 2.23 percent in 2010.

The report also includes new data for December, showing 10,876 U.S. properties with foreclosure filings, up 8 percent from the previous month but down 80 percent from a year ago.

“The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties,” said Rick Sharga, Executive Vice President of RealtyTrac, an ATTOM Data Solutions company. “There is a backlog of foreclosures building up – loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic.”

Sharga noted while it’s “still highly unlikely that we’ll see another wave of foreclosures like the one we had during the Great Recession, we really won’t know how big that backlog is until after the government programs expire.”

Key report findings:

–Lenders repossessed 50,238 properties through foreclosure in 2020, down 65 percent from 2019 and down 95 percent from a peak of 1,050,500 in 2010, to the lowest level as far back as data is available, 2006. Lenders repossessed 1,972 U.S. properties through completed foreclosures in December, down 2 percent from last month and down 86 percent from a year ago.

–Lenders started the foreclosure process on 131,372 U.S. properties in 2020, down 61 percent from 2019 and down 94 percent from a peak of 2,139,005 in 2009, to a record low.

“The impact of the government foreclosure moratoria and mortgage forbearance programs is nowhere more obvious than in the foreclosure start numbers from 2020,” Sharga said. “We ended the year with a near-record number of seriously delinquent loans, but historically low levels of foreclosure activity. The good news is that the government and mortgage industry succeeded in working together to prevent unnecessary foreclosures; the question remains how many homeowners whose finances have been affected by the pandemic will ultimately default on their loans, and whether the strength of the housing market will help cushion the fallout.”

–States that saw declines in foreclosure starts from last year included Oregon (down 79 percent); Kansas (down 77 percent); Arkansas (down 77 percent); Nevada (down 71 percent); and Massachusetts (down 70 percent). Metros with a population greater than 1 million that had at least 500 foreclosure starts in 2020 and saw the greatest decline in foreclosure starts from last year, included Jacksonville, Fla. (down 74 percent); Las Vegas (down 74 percent); Washington, D.C. (down 72 percent); Memphis, Tenn. (down 72 percent); and Orlando, Fla. (down 71 percent).

–States with the highest foreclosure rates in 2020 were Delaware (0.33 percent); New Jersey (0.31 percent); Illinois (0.30 percent); Maryland (0.26 percent); and South Carolina (0.24 percent).

–Among 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in 2020 were Peoria, Ill. (0.48 percent); Rockford, Ill. (0.44 percent); Trenton, N.J. (0.44 percent); Atlantic City, N.J. (0.40 percent); and McAllen, Texas (0.35 percent).

–U.S. properties foreclosed in fourth quarter 2020 had been in the foreclosure process an average of 857 days, a 3 percent increase from the previous quarter and from a year ago. States with the longest average time to foreclose in Q4  were Hawaii (2,186 days); New York (1,465 days); Kentucky (1,390 days); Pennsylvania (1,275 days); and Massachusetts (1,223 days).