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Foreclosure Activity Drops to All-Time Low

ATTOM, along with its subsidiary RealtyTrac, has released its year-end 2021 Foreclosure Market Report which has found that there was a total of 151,153 properties with foreclosure filings against them over the course of the year, down 29% from 2020 and down 95% from a peak of 2.9 million filings seen in 2010, to the lowest level seen since tracking began in 2005. 

According to ATTOM's report, the 151,153 properties with foreclosure filings in 2021 "represented 0.11% of all U.S. housing units, down from 0.16% in 2020 and down from a peak of 2.23% in 2010."

“The COVID-19 foreclosure tsunami that some people had anticipated is clearly not happening,” said Rick Sharga, EVP at RealtyTrac, an ATTOM company. “Government and mortgage industry efforts have prevented millions of unnecessary foreclosures, and while it’s likely that we’ll see a slight increase in the first quarter, we probably won’t see foreclosure activity back to normal levels before the end of 2022.” 

In addition to the yearly data, foreclosure data for December 2021 was also released which found that there were 17,971 properties with some sort of foreclosure filings against them, down 8% from November, but up 65% year-over-year. 

As a whole, banks repossessed 25,662 properties through the REO foreclosure process. This is down 49% year-over-year and down 98% from the 2010 peak when 1,050,500 properties were repossessed. 

“We believe that repossessions will continue to be lower than normal throughout 2022,” Sharga noted. “Homeowners have a record amount of equity—over $23 trillion—and over 87% of homeowners in foreclosure have positive equity. This means that most borrowers will have an opportunity to sell their house at a profit rather than lose everything to a foreclosure auction.” 

As a whole, foreclosure starts are at a new record low. In 2021, lenders started the foreclosure process in 92,346 properties, a 30% reduction from 2020 and a 96% reduction from its peak in 2009 when lenders started the foreclosure process on 2,139,005 properties. 

States that saw the greatest decline in foreclosure starts from last year included Maryland (down 81%); Oklahoma (down 70%); Idaho (down 64%); Nebraska (down 63%); and Connecticut (down 60%). 

“The government’s foreclosure moratorium, the mortgage forbearance program, and the mortgage servicing guidelines enacted by the CFPB in August have kept foreclosure starts artificially low over the past year,” Sharga added. “While the recovering economy should prevent a huge increase in defaults, we should see a gradual increase in foreclosure activity as these programs expire, and servicers exhaust all loan modification options for delinquent borrowers.” 

Bucking the national trend of decreasing foreclosure starts, four states saw an annual increase: South Dakota (up 20%); Vermont (up 36%); North Dakota (up 71%); and Nevada (up 85%). 

States with the highest foreclosure rates in 2021 were Nevada (0.26% of housing units with a foreclosure filing); Illinois (0.23%); Florida (0.21%); Delaware (0.21%); and New Jersey (0.19% 

On a monthly basis, in December, one in every 7,647 properties had a foreclosure filing against it. 9,165 properties entered the foreclosure in December, down 12% from November and lenders completed the process on 3,093 properties, a 33% monthly increase. 

The average length of time of a foreclosure takes stands at 941 days nationally, with the highest amounts of time being found in Hawaii (2,491 days); New York (1,529 days); Pennsylvania (1,502 days); Louisiana (1,476 days); and Florida (1,378 days). 

Data for the report was gleaned from data entered into the ATTOM Data Warehouse over the course of the year which covers more than 3,000 counties nationwide, or about 99% of the total papulation. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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