Foreclosures Continue Their Ascent But Could Level Off

As expected, the number of foreclosure filings across the country continues to climb upward, rising another 5% last month according to a new report from ATTOM Data Solutions, though analysts remain hopeful that the country is not headed toward a damaging spiral or crisis of home repossessions.

“Foreclosure activity continues to increase,” said Rick Sharga, executive vice president at ATTOM subsidiary RealtyTrac, in a statement. “But it’s increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans that were in foreclosure prior to the pandemic.”

Three months after a federal foreclosure moratorium ended for many borrowers, default notices, scheduled auctions and bank repossessions have all steeply risen, but the latest report is a significant pullback from initial spikes in foreclosures.

In August, when borrowers were first exposed to the foreclosure process after 18 months of protections, the country saw a 27% jump month-over-month. Back then, observers were hopeful that banks would be willing to work with people to prevent evictions, auctions and repossessions, and it remains unclear whether this is happening or whether new filings are simply delayed.

Numbers and Geography

Lenders started new foreclosure filings on 10,759 properties in October, also up 5% from the previous month. A total of 20,587 properties had foreclosure proceedings.

This is still much lower than pre-pandemic levels, however. October of 2019 saw 28,667 new filings, when a total of 55,197 properties were in the foreclosure process.

Sharga said that it will take some time for the balance of filings to get back to previous levels after the 18-month freeze.

“Most foreclosure activity for the next few months is likely to be foreclosure starts since virtually nothing entered the foreclosure process during the past year,” Sharga added.

As far as where foreclosures are increasing, the list of top states for overall foreclosures has remained relatively static since the moratorium was lifted. This month, those states were: