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After A Decade Of Declines, Foreclosure Activity Is On The Rise

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Many loans would have been foreclosed if not for federal government protections enacted during the early days of the COVID-19 pandemic, according to a new report from Attom Data Solutions.

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After more than a decade of declines that sent foreclosure activity to a historic low point, the number of properties at some point in the foreclosure process is on the rise this year.

There have been a total of 164,581 properties with either a default notice, a scheduled auction or under a bank repossession, according to a report from Attom Data Solutions released Thursday.

The nation is on track for its first annual increase of foreclosed properties since 2010, a year that marked the beginning of a long downward trend that appears to have bottomed out last year.

“Foreclosure activity across the United States continued its slow, steady climb back to pre-pandemic levels in the first half of 2022,” said Rick Sharga, executive vice president of market intelligence at Attom. “While overall foreclosure activity is still running significantly below historic averages, the dramatic increase in foreclosure starts suggests that we may be back to normal levels by sometime in early 2023.”

During the first six months of 2010 there were foreclosure filings on 1.6 million properties nationwide. In 2021, there were just over 65,000 during that time, according to Attom.

Congress enacted a foreclosure moratorium in the early days of the pandemic, preventing foreclosure activity on federally backed mortgages. The moratorium was extended through July 2021, contributing to the dearth of foreclosures and related evictions.

“Many of these loans were protected by the government’s foreclosure moratorium, or they would have already been foreclosed on two years ago,” Sharga said. “There’s very little delinquency or default activity that’s truly new in the numbers we’re tracking.”

During that time homeowners also benefited from a meteoric rise in home prices, offering another source of protection from foreclosure through equity.

During the first six months of this year 96 percent of major metro areas saw an increase in foreclosure activity, according to Attom. Rates are highest in Illinois, New Jersey and Ohio.

The number of foreclosures so far this year is up 153 percent over the same time last year and just shy of 2020.

National foreclosure activity was still 68 percent below what it was just before the Great Recession from 2006 to 2007. During that time the nation saw an average of 278,912 home foreclosures every three months.

A total of 117,383 properties started the foreclosure process during the first six months of the year. That’s up 219 percent from last year and 19 percent from 2020.

“It’s important to note that many of the foreclosure starts we’re seeing today — in fact, much of the overall foreclosure activity we’re seeing right now — is on loans that were either already in foreclosure or were more than 120 days delinquent prior to the pandemic,” Sharga said.

There were just seven metro areas in which foreclosure activity declined to start the year.

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