The Moratoriums Stay In Place And Foreclosures Remain Low

Even as the mortgage delinquencies rise, because of the continuation of moratoriums ordered by federal and state governments in the early stages of COVID-19 pandemic, the Foreclosure activity in the United States of America remains low.

Rick Sharga, executive vice president at real estate data firm RealtyTrac said “It’s inevitable that there will be a significant increase in foreclosures once these moratoriums have expired, although it’s unlikely that we’ll see default rates reach the levels we saw during the Great Recession.”

The report states that 8,892 homes received a foreclosure filing in July, a number that includes default notices, scheduled activities, and bank repossessions. Which is down 83% from last year. 

Data shows that nationwide, just one out of every 15,337 homes had a foreclosure filing in July.

According to the National Association of Realtors’ data, in the previous month, just 3% of sales involved foreclosures and short sales.

With foreclosure moratoriums still in place, another wave of foreclosures likely won’t materialize until at least next year, after the maximum 12 months of mortgage forbearance expires for homeowners. 

Economists say that if homeowners are able to return to work within this time, the economy won’t need to fear a foreclosure crisis. 

Housing analysts feel some impact is inevitable even when the moratoriums expire.

Some economists feel there will be fallouts but not so much that the housing prices will drop.

The RealtyTrac report noted that the states with the highest foreclosure rates are

Delaware (one in every 6,489 housing units with a foreclosure filing); 

South Carolina (one in every 7,328 housing units); 

Maine (one in every 7,542 housing units); 

New Mexico (one in every 8,255 housing units);  

California (one in every 9,194 housing units).