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Easing Foreclosure Flood Fears

Because of forclosure moratoria and other government agency actions related to economic fallout from the coronavirus pandemic, foreclosure filings in America remain at record lows. But what will happen when certain allowances expire?

ATTOM Data Solutions and RealtyTrac's April 2021 U.S. Foreclosure Market Report, which shows there were a total of 11,810 U.S. properties with foreclosure filings—default notices, scheduled auctions, or bank repossessions—down 1% from a month ago and down 17 percent from a year ago.

Nationwide one in every 11,636 housing units had a foreclosure filing in April, the researchers reported.

States with the highest foreclosure rates were Delaware, which showed one in every 5,700 housing units with a foreclosure filing; Nevada, with one in every 5,738 housing units; Illinois, one in every 5,890; Florida, showing one in every 6,375; and New Jersey with one in every 6,390 units.

“Foreclosure activity continues to trend near historic lows as we enter the 14th  month of the Federal Government’s foreclosure and eviction moratorium,” said Rick Sharga, EVP at RealtyTrac, an ATTOM Data Solutions company. “Coupled with the CARES Act mortgage forbearance program, the government and mortgage servicing industry have worked together exceptionally well to prevent millions of unnecessary foreclosures. Because of these programs, and the nearly 90% success rate of borrowers resuming mortgage payments as they exit forbearance, a large influx of foreclosures when the programs expire seems very, very unlikely.”

Lenders started the foreclosure process on 6,355 U.S. properties in April 2021, which is down 1% from last month and down 26% from a year ago.

“April 2020 was the first full month of the foreclosure moratorium, and foreclosure activity that month dropped by 75% compared to April 2019,” Sharga noted. “Given that, it’s a little surprising to see foreclosures drop by another 24% compared to last year, but virtually all of the foreclosure activity today is made up of vacant and abandoned properties, or commercial loans, which often don’t have the same protections as loans on residential properties.”

Certain states bucked the trend and showed more than 100 foreclosures during the month—Washington, New York, Kentucky, Alabama, and Indiana.

Lenders repossessed 1,555 U.S. properties through completed foreclosures (REOs) throughout the month, down 1% from the previous month and down 41% from the previous year.

California, Florida,  Illinois, Texas, and New Jersey had the most REOs.

ATTOM/RealtyTrac's full foreclosure reports are available at ATTOM.com.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.
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