Foreclosures Up 68% – but Less than Pre-Pandemic

NEW YORK – ATTOM has released its Q3 2021 U.S. Foreclosure Market Report, which shows there were a total of 45,517 U.S. properties with foreclosure filings default notices, scheduled auctions or bank repossessions up 34% from the previous quarter and 68% from a year ago.

The report also shows there were a total of 19,609 U.S. properties with foreclosure filings in September 2021, up 24% from the previous month and up 102% from September 2020.

“Despite the increased level of foreclosure activity in September, we’re still far below historically normal numbers,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM company. “September foreclosure actions were almost 70% lower than they were prior to the COVID-19 pandemic in September of 2019, and Q3 foreclosure activity was 60% lower than the same quarter that year. Even with similar increases in foreclosures over the next few months, we’ll end the year significantly below what we’d see in a normal housing market.”

Foreclosure starts jump up nationwide

Lenders started the foreclosure process on 25,209 U.S. properties in Q3 2021, up 32% from the previous quarter and up 67% from a year ago, the first double digit quarterly percent increase since 2014.

States that posted the greatest number of foreclosure starts in Q3 2021, included California (3,434 foreclosure starts); Texas (2,827 foreclosure starts); Florida (2,546 foreclosure starts); New York (1,363 foreclosure starts); and Illinois (1,362 foreclosure starts).

Among the 220 metropolitan statistical areas analyzed in the report, those that posted the greatest number of foreclosure starts in Q3 2021, included New York, New York (1,456 foreclosure starts); Chicago, Illinois (1,122 foreclosure starts); Los Angeles, California (1,102 foreclosure starts); Miami, Florida (992 foreclosure starts); and Houston, Texas (866 foreclosure starts).

Counter to the national trend of quarterly increases, among those metropolitan areas with a population greater than one million that saw a decline in foreclosure starts in Q3 2021 were Charlotte, North Carolina (down 32%); Portland, Oregon (down 26%); Rochester, New York (down 17%); San Jose, California (down 13%); and Hartford, Connecticut (down 6%).

“So far the government and the mortgage industry have worked together to do an extraordinary job of preventing millions of unnecessary foreclosures using the foreclosure moratorium and mortgage forbearance program,” Sharga added. “But there are hundreds of thousands of borrowers scheduled to exit forbearance in the next two months, and it’s possible that we might see a higher percentage of those borrowers default on their loans.”

Highest foreclosure rates in Nevada, Illinois and Delaware

Nationwide one in every 3,019 properties had a foreclosure filing in Q3 2021. States with the highest foreclosure rates in Q3 2021 were Nevada (one in every 1,463 housing units with a foreclosure filing); Illinois (one in every 1,465); Delaware (one in every 1,515); New Jersey (one in every 1,667); and Florida (one in every 1,743).

Among 220 metropolitan statistical areas analyzed in the report, those with the highest foreclosure rates in Q3 2021 were Atlantic City, New Jersey (one in every 709 housing units with a foreclosure filing); Peoria, Illinois (one in every 754); Bakersfield, CA (one in every 923); Cleveland, Ohio (one in every 936); and Las Vegas, Nevada (one in every 1,167).

Bank repossessions increase nationwide

Lenders repossessed 7,574 U.S. properties through foreclosure (REO) in Q3 2021, up 22% from the previous quarter and up 46% from a year ago the first quarterly increase since Q1 2016.

States that posted the largest number of completed foreclosures in Q3 2021, included Illinois (965 REOs); Florida (564 REOs); Pennsylvania (480 REOs); Michigan (401 REOs); and New York (370 REOs).

Average time to foreclose increases 11% from last year

Properties foreclosed in Q3 2021 had been in the foreclosure process an average of 924 days, up slightly from 922 days in the previous quarter but up 11% from 830 days in Q3 2020.

States with the longest average foreclosure timelines for homes foreclosed in Q3 2021 were Hawaii (2,070 days); Nevada (1,989 days); Kansas (1,901 days); New York (1,659 days); and Washington (1,611 days).

States with the shortest average foreclosure timelines for homes foreclosed in Q3 2021 were Montana (94 days); Wyoming (102 days); Mississippi (133 days); Missouri (213 days); and Virginia (272 days).

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