U.S. foreclosure activity decreased again last month

Foreclosure activity decreased again last month, as the U.S. passed the one-year mark since the government instituted the foreclosure moratorium amid the COVID-19 pandemic. This reduced activity indicates the “looming foreclosure crisis” could be less dire than previously thought, according to a new report. 

ATTOM Data Solutions released its April 2021 U.S. Foreclosure Market Report, which shows there were a total of 11,810 U.S. properties with foreclosure filings—which include default notices, scheduled auctions or bank repossessions—down 1% from a month ago and 17% from a year ago.

“Foreclosure activity continues to trend near historic lows as we enter the 14th month of the Federal Government’s foreclosure and eviction moratorium,” said Rick Sharga, executive vice president at RealtyTrac. “Coupled with the CARES Act mortgage forbearance program, the government and mortgage servicing industry have worked together exceptionally well to prevent millions of unnecessary foreclosures. Because of these programs, and the nearly 90% success rate of borrowers resuming mortgage payments as they exit forbearance, a large influx of foreclosures when the programs expire seems very, very unlikely.”

Delaware, Nevada and Illinois had the highest foreclosure rates

Nationwide one in every 11,636 housing units had a foreclosure filing in April 2021. States with the highest foreclosure rates were Delaware (one in every 5,700 housing units with a foreclosure filing); Nevada (one in every 5,738 units); Illinois (one in every 5,890 units); Florida (one in every 6,375 units); and New Jersey (one in every 6,390 units).

Among the 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in April 2021 were Macon, Georgia (one in every 2,334 housing units with a foreclosure filing); Provo, Utah (one in every 3,295 units); Pensacola, Florida (one in every 3,492 units); Cleveland, Ohio (one in every 3,550 units); and Beaumont, Texas (one in every 3,561 units).

Those metropolitan areas with a population greater than 1 million, with the worst foreclosure rates in April 2021 including Cleveland, Ohio, were: Las Vegas, Nevada (one in every 4,838 units); Riverside, California (one in every 5,020 housing units); Jacksonville, Florida (one in every 5,243 units); and Chicago, Illinois (one in every 5,324 units).

Foreclosure starts increase monthly in 24 states nationwide

Lenders started the foreclosure process on 6,355 U.S. properties in April 2021, down 1% from last month and down 26% from a year ago.

“April 2020 was the first full month of the foreclosure moratorium, and foreclosure activity that month dropped by 75% compared to April 2019,” Sharga noted. “Given that, it’s a little surprising to see foreclosures drop by another 24% compared to last year, but virtually all of the foreclosure activity today is made up of vacant and abandoned properties, or commercial loans, which often don’t have the same protections as loans on residential properties.”

Counter to the national trend, states that had at least 100 foreclosure starts in April 2021 and saw the greatest monthly increase in foreclosure starts included: Washington (+76%); New York (+53%); Kentucky (+47%); Alabama (+28%); and Indiana (+26%).

In looking more granular, those counties that had the greatest number of foreclosure starts in April 2021 included: Los Angeles County, California (259 foreclosure starts); Cook County, Illinois (256 foreclosure starts); Clark County, Nevada (142 foreclosure starts); Riverside County, California (98 foreclosure starts); and Maricopa County, Arizona (86 foreclosure starts).

Completion numbers in foreclosure activity decreased 1% from last month

Lenders repossessed 1,555 U.S. properties through completed foreclosures (REOs) in April 2021, down 1% from last month and 41% from last year.

Those states that had the greatest number of REOs in April 2021, included: California (190 REOs); Florida (176 REOs); Illinois (127 REOs); Texas (111 REOs); and New Jersey (109 REOs).

Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in April 2021 included: Chicago, IL (113 REOs); Philadelphia, PA (90 REOs); Riverside, CA (53 REOs); Los Angeles, CA (43 REOs); and Miami, FL (35 REOs).