Foreclosure Activity Rises to Near Pre-Pandemic Levels

ATTOM, Irvine, Calif., reported September foreclosure activity rose by 3 percent in the third quarter and by 104 percent from a year ago.

The company’s third quarter U.S. Foreclosure Market Report found 92,634 properties with foreclosure filings. It also reported 31,836 U.S. properties with foreclosure filings in September, down 8 percent from the previous month but up 62 percent from a year ago.

Courtesy ATTOM, Irvine, Calif.

The report said lenders started the foreclosure process on 67,249 U.S. properties in the third quarter, up 1 percent from the previous quarter and up 167 percent from a year ago — nearly reaching pre-pandemic levels.

“Foreclosure starts, while rising since the end of the government’s foreclosure moratorium, still lag behind pre-pandemic levels,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Foreclosure activity is reflecting other aspects of the economy, as unemployment rates continue to be historically low, and mortgage delinquency rates are lower than they were before the COVID-19 outbreak.”

States that posted the greatest number of foreclosure starts in the third quarter included California (7,368); Florida (6,671); Texas (6,217); Illinois (4,702); and New York (3,997).

Among the 223 metropolitan statistical areas, foreclosure starts in the third quarter were highest in New York, (4,621); Chicago (3,950); Los Angeles (2,275); Philadelphia (1,991 foreclosure starts); and Miami (1,990).

The report said nationwide, one in every 1,517 properties had a foreclosure filing in the third quarter, with the highest rates in Illinois (one in every 694 housing units); Delaware (one in every 825); New Jersey (one in every 855); South Carolina (one in every 971); and Ohio (one in every 1,027).

Lenders repossessed 10,515 U.S. properties through foreclosure (REO) in the third quarter, up 18 percent from the previous quarter and up 39 percent from a year ago.

“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure,” Sharga said. “Nearly three times more homes were repossessed by lenders in the second quarter of 2019 than in the second quarter of 2022. We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”

States that posted the largest number of completed foreclosures in the third quarter included Illinois (1,331 REOs); Michigan (729); New York (695); Pennsylvania (643); and Ohio (557).

The report said properties foreclosed in Q3 2022 had been in the foreclosure process an average of 885 days, down from 948 days in the previous quarter and down 4 percent from 924 days a year ago. States with the longest average foreclosure timelines for homes foreclosed in the third quarter were Hawaii (2,121 days); New Jersey (2,002 days); Louisiana (1,963 days); Kansas (1,848 days); and New York (1,808 days). States with the shortest average foreclosure timelines were Minnesota (113 days); Mississippi (167 days); Texas (168 days); Nebraska (168 days); and Missouri (172 days).