Mortgage

Foreclosures begins by leaps and bounds in September

Both quarterly and monthly foreclosures have been initiated and filed since the state moratorium ended.

Mortgage servants started 10,289 foreclosures in September, 23% up from 8,348 in August and 106% year-over-year, according to Attom Data Solutions. 25,209 foreclosures were initiated in the third quarter, 32% more than in the second quarter and 67% more than a year earlier. It represented the first quarterly increase of over 10% since 2014 and the highest since Attom's persecution began in 2005, surpassing 28% in the first quarter of 2009.

Filings – defined as reminders, bank seizures, or auctions – followed similar patterns, with 45,517 properties impacted in the third quarter, an increase of 34% over Q2 and 68% over Q3 2020, 15,838 in August and 102 % compared to the previous year.

However, the numbers are still well below pre-pandemic levels. According to Rick Sharga, Executive Vice President of Attom subsidiary RealtyTrac, foreclosure activity is about 70% below September 2019 and 60% below Q3 2019. The increased activity is likely to continue in the future as much of the forbearance plans is terminated.

"Hundreds of thousands of borrowers are planned to get out of deferral in the next two months and it is possible that a higher percentage of these borrowers will default on their loans," Sharga said in the report.

At the state level, California had the most foreclosure starts in the third quarter with 3,434, followed by Texas with 2,827, Florida with 2,546, New York with 1,363 and Illinois with 1,362. Of the 220 housing markets that Attom observed, most of the launches came in New York with 1,456, Chicago with 1,122, Los Angeles with 1,102, Miami with 992 and Houston with 866.

Foreclosures completed were 7,574 in the third quarter, up 22% per quarter – the first quarterly increase since Q1 2016 – and 46% annually. September also saw property owned increases of 2,682, up 8% monthly and 33% year-over-year. Illinois had the most REOs in the quarter at 965, followed by 564 in Florida and 480 in Pennsylvania.

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