Home / Daily Dose / Putting Foreclosure Trends in Perspective
Print This Post Print This Post

Putting Foreclosure Trends in Perspective

ATTOM’s May 2021 U.S. Foreclosure Market Report has found there were a total of 10,821 U.S. properties with foreclosure filings—encompassing default notices, scheduled auctions or bank repossessions—down 8% from a month ago, but up 23% year-over-year. Foreclosure starts, which represent the initial notice of default, grew by 36% year-over-year.

The May 2021 U.S. Foreclosure Market Report shows that, nationwide, one in every 12,700 housing units had a foreclosure filing. States with the highest foreclosure rates in the month of May included:

  • Nevada (one in every 5,535 housing units with a foreclosure filing)
  • Delaware (one in every 5,854 housing units)
  • Illinois (one in every 5,903 housing units)
  • Florida (one in every 7,207 housing units)
  • New Jersey (one in every 7,679 housing units)

"While the increase in foreclosure activity is significant, it's important to keep these numbers in perspective," said RealtyTrac EVP Rick Sharga. "Last year's numbers were extraordinarily low due to the implementation of the foreclosure moratorium and the CARES Act mortgage forbearance program, so the year-over-year numbers look a lot more dramatic than they are. And May foreclosure activity actually declined compared to April."

Among the 220 metro areas with a population of at least 200,000, those with the highest foreclosure rates in May 2021 included:

  • Champaign, Illinois (one in every 2,420 housing units with a foreclosure filing)
  • Peoria, Illinois (one in every 3,030 housing units)
  • Cleveland, Ohio (one in every 3,715 housing units)
  • Bakersfield, California (one in every 3,774 housing units)
  • Mobile, Alabama (one in every 4,174 housing units)

Lenders began the foreclosure process on 5,909 properties in May 2021, down 7% from April 2021, and up 36% from a year ago. Counter to the national trend, states that had at least 100 foreclosure starts in May 2021 and saw the greatest monthly increase in foreclosure starts included:

  • Ohio (+96%)
  • Alabama (+78%)
  • Michigan (+65%)
  • Georgia (+61%)
  • Virginia (+50%)

Lenders repossessed 1,315 U.S. properties through completed foreclosures (REOs) in May 2021, down 15% from April’s totals, and down 54 percent from May 2020. Those states that had the greatest number of REOs in May 2021, included:

  • California (154 REOs)
  • Florida (148 REOs)
  • Illinois (144 REOs)
  • Texas (83 REOs)
  • Ohio (70 REOs)

The number of U.S. homes in forbearance plans continues to decline, as this week, the Mortgage Bankers Association (MBA) reported that approximately two million homeowners are currently in forbearance plans. In total, a 4.04% share of all mortgage volume is in a state of forbearance, marking the 15th consecutive week of decline on the forbearance front.

Another positive sign is the uptick in employment, with the U.S. Department of Labor reporting initial unemployment claims 376,000 for the week ending June 5, a decrease of 9,000 from the previous week's unrevised level of 385,000, marking the lowest level for initial claims since March 14, 2020 when it was 256,000.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

Check Also

CFPB Releases Annual Report on Residential Mortgage Lending Activity

"The higher interest rate environment had profound effects on the mortgage market in 2022, with borrowers paying much more in monthly payments,” said CFPB Director Rohit Chopra. Click through to read more on the CFPB’s analysis of 2022 HMDA data.