Default notices, scheduled auctions and bank repossessions were reported on 214,323 U.S. properties in 2020, down 57 percent from 2019 and down 93 percent from a peak of nearly 2.9 million in 2010, according to ATTOM Data Solutions’ year-end 2020 U.S. foreclosure market report.
The number of properties with foreclosure filings in 2020 represented 0.16 percent of all U.S. housing units, down from 0.36 percent in 2019 and down from a peak of 2.23 percent in 2010, ATTOM said.
In December 2020, there were 10,876 U.S. properties with foreclosure filings, up 8 percent from the previous month but down 80 percent from a year ago.
“The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties. There is a backlog of foreclosures building up – loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. “While it’s still highly unlikely that we’ll see another wave of foreclosures like the one we had during the Great Recession, we really won’t know how big that backlog is until after the government programs expire.”
According to the report, lenders repossessed 50,238 properties through foreclosure (REO) in 2020, down 65 percent from 2019 and down 95 percent from a peak of 1,050,500 in 2010, to the lowest level as far back as data is available — 2006.
Despite the impact of the forbearance programs, there were metropolitan statistical areas with populations greater than 200,000 that had year-over-year increases in REOs, including Lake Havasu, Ariz. (up 30 percent); Champaign, Ill. (up 29 percent); Chico, Calif. (up 26 percent); and Bremerton, Wash. (up 25 percent).
ATTOM said lenders started the foreclosure process on 131,372 U.S. properties in 2020, down 61 percent from 2019 and down 94 percent from a peak of 2,139,005 in 2009, to a new all-time low.
“The impact of the government foreclosure moratoria and mortgage forbearance programs is nowhere more obvious than in the foreclosure start numbers from 2020,” Sharga said. “We ended the year with a near-record number of seriously delinquent loans, but historically low levels of foreclosure activity.
“The good news is that the government and mortgage industry succeeded in working together to prevent unnecessary foreclosures; the question remains how many homeowners whose finances have been affected by the pandemic will ultimately default on their loans, and whether the strength of the housing market will help cushion the fallout,” he said.
ATTOM said states that saw declines in foreclosure starts from last year included Oregon (down 79 percent); Kansas (down 77 percent); Arkansas (down 77 percent); Nevada (down 71 percent); and Massachusetts (down 70 percent).
Large metropolitan areas that had the greatest decline in foreclosure starts were Jacksonville, Fla. (down 74 percent); Las Vegas (down 74 percent); Washington, D.C. (down 72 percent); Memphis, Tenn. (down 72 percent); and Orlando, Fla. (down 71 percent).
The report identified the states with the highest foreclosure rates in 2020 as Delaware (0.33 percent of housing units with a foreclosure filing); New Jersey (0.31 percent); Illinois (0.30 percent); Maryland (0.26 percent); and South Carolina (0.24 percent).
The metropolitan statistical areas (with populations of at least 200,000) with the highest foreclosure rates in 2020 were Peoria, Ill. (0.48 percent of housing units with a foreclosure filing); Rockford, Ill. (0.44 percent); Trenton, N.J. (0.44 percent); Atlantic City (0.40 percent); and McAllen, Texas (0.35 percent).
ATTOM said the metro areas (with populations greater than 1 million) with highest foreclosure rates in 2020 were Cleveland (0.34 percent); Chicago (0.30 percent); Baltimore (0.29 percent); Philadelphia (0.29 percent); and Riverside, Calif. (0.28 percent).
The states with the longest average time to foreclose in the fourth quarter were Hawaii (2,186 days); New York (1,465 days); Kentucky (1,390 days); Pennsylvania (1,275 days); and Massachusetts (1,223 days).