Foreclosure activity hits new low

Foreclosure activity hit record lows in the third quarter as COVID-19-related moratoria stalled filings, according to new data from ATTOM Data Solutions.

According to ATTOM’s Q3 2020 U.S. Foreclosure Market Report, there were 27,016 US properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – in the third quarter. That’s down 12% from Q2 and down 81% year over year. Foreclosure filings in the third quarter were at their lowest level since ATTOM began tracking the data in the first quarter of 2008.

The report also found that there were a total of 9,707 properties with foreclosure filings in September, down 2% from August and 80% year over year.

“Foreclosure activity has, for all intents and purposes, ground to a halt due to moratoria put in place by the federal, state and local governments and the mortgage forbearance program initiated by the CARES Act,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data company.

“But it’s important to remember that the numbers we’re seeing are artificially low, even as the number of seriously delinquent loans continues to increase, and that we’ll see a significant – and probably quite sudden – burst of foreclosure activity once these various government programs expire.”

Foreclosure starts were also down nationwide. Lenders started the foreclosure process on 15,129 properties in Q3, a 15% drop from Q2 and an 81% drop year over year. Q3 marked the 21st consecutuive quarter with a year-over-year decrease in foreclosure starts.

Pennsylvania posted the greatest decrease in foreclosure starts at 95%, followed by Wisconsin (93%), Washington state (93%), Maryland (91%) and Colorado (90%).

Among Metro areas, Washington, D.C., say the biggest decrease in foreclosure starts at 91%, followed by Philadelphia (90%), Cleveland (89%), Denver (89%) and Baltimore (88%).

States with the highest foreclosure rates in the third quarter included Delaware (one in every 3,482 housing units with a foreclosure filing), New Jersey (one in every 3,314), New Mexico (one in every 3,079), Illinois (one in every 3,031), and South Carolina (one in every 2,339).