Report reveals why repossession remains low despite rise in foreclosure activity.
Foreclosure filings on US properties in 2022 were up 115% from 2021, according to the year-end 2022 Foreclosure Market Report from ATTOM.
Properties with foreclosure filings represented 0.23% of all US housing units, up slightly from 0.11% in 2021 but down from 0.36% in 2019 and a peak of 2.23% in 2010.
“Eighteen (18) months after the end of the government’s foreclosure moratorium, and with less than 5% of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic,” said Rick Sharga, executive vice president of market intelligence at ATTOM.
Sharga attributes this to government and mortgage industry efforts during the pandemic, coupled with a strong economy, which helped prevent millions of unnecessary foreclosures.
The report also showed there were 30,822 properties with foreclosure filings, an increase of less than 1% from the previous month and a 72% surge from a year ago. In December 2022, one in every 4,558 properties had a foreclosure filing nationwide.
But unlike foreclosure activity during the Great Recession, the majority of homes in foreclosure are not being repossessed by lenders, Sharga noted.
“Our recent homeowner equity report shows that 93% of borrowers in foreclosure today have positive equity, which they appear to be leveraging in order to avoid a foreclosure by refinancing their mortgage or selling the property at a profit,” he said. “It seems likely that this is a trend that will continue in 2023.”