ATTOM: Foreclosure rates returning to pre-pandemic levels

ATTOM’s 2022 U.S. Foreclosure Market Report shows that foreclosure filings are up 118% compared to this time last year.

In August alone, lenders in the United States began the foreclosure process on 23,952 properties. Numbers that high haven’t been seen since before the COVID-19 pandemic.

“Two years after the onset of the COVID-19 pandemic, and after massive government intervention and mortgage industry efforts to prevent defaults, foreclosure starts have almost returned to 2019 levels,” says Rick Sharga, ATTOM’s executive VP of marketing intelligence. “August foreclosure starts were at 86% of the number of foreclosure starts in August 2019, but it’s important to remember that even then, foreclosure activity was relatively low compared to historical averages.”

The states with the greatest increases in foreclosure starts include Oklahoma, Tennessee, Virginia, Arkansas, and Washington, although the highest amount of foreclosure starts occurred in Cook County, IL with 798. Illinois also saw the highest foreclosure rate in 2022, with one out of every 4,072 houses filing for foreclosure.

For metropolitan areas with populations of at least 200,000, Peoria, IL saw the most foreclosure filings (one in 968 houses); in metropolitan areas with populations over 1 million, Cleveland, OH saw the highest foreclosure numbers (one in 1,820 houses).

In addition to an increase in foreclosure starts and filings, completed foreclosures (REOs) are also up 59% compared to August 2021. Illinois topped the list of REOs in the first quarter of 2022, with 493 completed foreclosures by April of 2022.

“Repossessions are likely to continue running below pre-pandemic levels for several reasons,” Sharga added. “Most importantly that over 90% of borrowers in foreclosure have positive equity in their homes, and would benefit from selling these properties at a profit rather than risk losing everything to a foreclosure auction or lender repossession.”