July Foreclosure Filings Again Trended Down Amid Pandemic
Foreclosures are "artificially low" due to federal and state moratoriums and will significantly increase when those expire, but it’s unlikely default rates will reach the levels of the 2008 recession.
Foreclosure filings again trended downward in July due to federal and state moratoriums, even as mortgage delinquency rates climb, according to ATTOM Data Solutions’ latest U.S. foreclosure market report.
Last month there were 8,892 U.S. properties under foreclosure filings, whether default notices, scheduled auctions or bank repossessions. That’s down 4% from June and 83% from a year ago, the report said.
ATTOM is the parent company of RealtyTrac, a foreclosure listings portal, and it collects foreclosure filing data from over 2,200 counties nationally, accounting for more than 90% of the U.S. population.
Foreclosure activity remains “artificially low” due to federal and state stays on foreclosures amid the COVID-19 pandemic, said RealtyTrac’s executive vice president Rick Sharga in a statement.
Foreclosures will significantly increase when the stays expire, Sharga said, but he added that it’s unlikely default rates will reach the levels of the 2008 recession.
Foreclosure proceedings started for 4,530 properties nationally in July, down 7% from June and 83% from a year ago, according to ATTOM’s data.
Los Angeles was the largest metro area for new foreclosure filings with 285, followed by New York (190), Chicago (182), Houston (174) and Atlanta (125).
Countering the national trend, several states posted significant July increases in new foreclosures from June. In Connecticut they were up 54%, followed by Michigan (up 42%), Missouri (up 34%), and Virginia (up 32%).
Bank repossessions similarly dropped to their lowest levels in July. Lenders foreclosed on 2,163 properties nationally, down 14% from June and 80% from a year ago. That’s the lowest level since ATTOM began tracking REOs in 2005, the report said.
But even when default activity starts to increase, there may not be a similar increase in bank repossessions, Sharga said. “The combination of record levels of homeowner equity, extremely limited supply of homes for sale, and strong homebuyer demand should give many distressed homeowners an opportunity to sell their property rather than lose it to foreclosure.”
Ohio posted the highest number of completed bank foreclosures for July, with 222 REOs filed. That was followed by California (188), Illinois (165), New York (161), and New Jersey (144).