Foreclosure Activity In The U.S. Doubled in 2022 According To ATTOM

Foreclosure activity in the U.S. will double by 2022 but remain well below pre-pandemic levels, a new report says.

According to real estate data, from ATTOM’s 2022 year-end U.S. foreclosure market report released Thursday, the U.S. is expected to record 324,237 foreclosures in 2022, including default notices, scheduled auctions, and bank foreclosures, a 115 percent increase more than in 2021, but 34% less than in 2019, before the pandemic, shook the market. Foreclosure filings in 2022 are also down 89% from the 2010 peak of nearly 2.9 million.

The 324,237 properties with foreclosure filings in 2022 represent 0.23% of all US housing units, up slightly from 0.11% in 2021 and down from 0.36% in 2019 and a peak of 2.23% in 2010. 

Eighteen months after the government’s moratorium cap ended, less than 5 percent of the 8.4 million borrowers entered the CARES Act’s forbearance program, and foreclosure activity remained remarkably low, said Rick Sharga, ATTOM’s vice president of market research.

So this was before the COVID-19 pandemic. Government and mortgage industry efforts during the pandemic, combined with a strong economy, have helped prevent millions of unnecessary foreclosures. 

ATTOM’s year-end report provides the number of properties with foreclosures for the year, based on public records and published foreclosures collected in more than 3,000 counties nationwide, representing more than 99 percent of the U.S. population.

The report also includes new data for December 2022 showing that 30,822 U.S. properties had foreclosure filings, up less than 1% from the previous month but up 72% from a year ago. 

According to the report, lenders repossessed 42,854 properties through foreclosures (REOs) in 2022, up 67% from 2021 but down 70% from 2019 (143,955) and down from 1, the 05 million peaks in 2010, a 96% decline in Et reported.

The states with the highest number of REOs in 2022 are Illinois (5,518 REOs); Michigan (3,669); Pennsylvania (2,741); New York (2405); and California (2,223).

The metropolitan statistical areas with a population greater than 1 million that saw the greatest number of REOs in 2022 included Chicago (3,545 REOs); Detroit (2,135); New York (1,656); St. Louis (1,395); and Philadelphia (1,302).

Sharga also said that, unlike foreclosure activity during the Great Recession, the majority of foreclosure homes are not being repossessed by lenders. 

Their latest Homeowner Equity Report shows that 93% of borrowers currently in foreclosure have positive equity, which they appear to be used to avoid foreclosure by refinancing their mortgage or selling the property for a profit. This trend looks set to continue in 2023. 

Lenders initiated 248,170 U.S. foreclosures in 2022, up 169% from 2021, but down 26% from 2019 and down 88% from a peak of 2.14 million in 2009.

States with the highest number of foreclosure starts in 2022 include California (27,269 foreclosure starts); Texas (23,151); Florida (22,968); Illinois (16,941); and Ohio (13,469). 

Bucking the national trend, five states saw foreclosures increase from 2019: Indiana (up 81 percent); Michigan (up 10 percent); Idaho (up 8 percent); Colorado (up 2 percent) %); and Minnesota (up less than 1%).

Statistical metropolitan areas with populations greater than 1 million that will initiate foreclosures in 2022 include New York (15,821 foreclosures initiated); Chicago (14,360); Los Angeles (8,185); Philadelphia (7,286); and Miami (7,090). The states with the highest foreclosure restrictions in 2022 are Illinois (0.49% of housing units are foreclosed), New Jersey (0.45%), Delaware (0.4%), Ohio (0.38%), and South Carolina ( 0.37%).

Other highlights:

• Foreclosed US properties were closed for an average of 852 days in Q4 2022, down 4% from the previous quarter and down 9% from the same period last year.
• The states with the longest average foreclosure times in the fourth quarter of 2022 are Hawaii (2,546 days); New Jersey (2,041 days); Louisiana (1,925 days); New York (1,828 days); and Pennsylvania (1,692 days).
• In the 4th quarter of 2022, there were 90,715 foreclosures in the US, down 2% from the previous quarter but up 6% from a year earlier.
• Nationwide, one in every 1,549 properties had a foreclosure in the fourth quarter.
• Nationally, one in every 4,558 properties will be foreclosed on in December 2022.