While some anticipated a “tsunami” of foreclosure activity due to Covid, new data shows this activity was at its lowest levels since at least 2005.
ATTOM, a nationwide property data provider, recently released data comparing 2021 foreclosure activity back to the year it first began tracking this activity in 2005.
Foreclosure activity includes default notices, scheduled actions, bank repossessions, or complete foreclosures.
According to ATTOM, foreclosure filings were made on 151,153 U.S. properties last year. This is 29 percent fewer than in 2020, and 95 percent fewer than the highest level of 2.9 million in 2010.
In percentages, these filings included 0.11 percent of all housing units. This is compared to 0.16 percent in 2020 and the peak of 2.23 percent in 2010.
Rick Sharga, executive vice president at RealtyTrac, attributed these low levels to government and mortgage industry efforts.
He said these efforts prevented “millions of unnecessary foreclosures.” While an increase in the first quarter of the year is likely, he predicts foreclosure activity won’t be back to normal levels before the end of the year.
In the final months of 2021, many homeowners were near the end of their forbearance eligibility. As a result, foreclosure activity did increase.
However, experts believe repossessions will continue to be lower than normal throughout the year due to the record amount of equity available to homeowners.
Sharga said more than 87 percent of homeowners in foreclosure have positive equity. They could choose to sell their homes at a profit rather than lose them to foreclosure.
He expects a gradual increase in foreclosure activity as government programs such as the mortgage forbearance program and mortgage servicing guidelines expire in the coming months.
This activity shouldn’t skyrocket, he said, because of the recovering economy.
Additional homes popping up on the market to avoid foreclosure could help with supply issues as well.
The ATTOM data revealed that the states with the highest foreclosure rates included Nevada, Arizona, Illinois, Florida, Delaware, and New Jersey.
Homeowners struggling with monthly mortgage payments, or those near the end of their forbearance, should contact their mortgage lender, experts say.
Servicers have been working to help homeowners find loan modification options or to help them refinance for a better rate and terms.
Experts also are encouraging homeowners to tap into their available equity while home prices remain high. With a cash-out refinance, for example, homeowners can use the equity to pay down debts or make home improvements.
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