August foreclosures jump 27% after federal moratorium expires

Chicago has highest foreclosure rate

National /
Sep.September 13, 2021 02:36 PM
In Illinois, one in every 3,848 housing units received a foreclosure filing last month. (iStock)
In Illinois, one in every 3,848 housing units received a foreclosure filing last month. (iStock)

An onslaught of home foreclosures swept the country after the government’s foreclosure moratorium expired July 31.

Across the U.S., 15,838 properties had a foreclosure filing last month, up 27 percent from July. That is a 60 percent jump from a year ago, according to ATTOM’s August foreclosure market report. Illinois had the highest state foreclosure rate and Chicago the highest of any city with a population of more than 1 million.

“We’ll continue to see foreclosure activity increase over the next three months as loans that were in default prior to the moratorium re-enter the foreclosure pipeline, and states begin to catch up on months of foreclosure filings that simply haven’t been processed during the pandemic, said Rick Sharga, executive vice president of Attom subsidiary RealtyTrac. “But it’s likely that foreclosures will remain below normal levels at least through the end of the year.”

In Illinois, one in every 3,848 housing units received a foreclosure filing last month. Nevada followed with one in every 4,738 unit filing for foreclosure, followed by New Jersey (one in every 4,868 housing units), Delaware (one in every 5,348 housing units) and Ohio (one in every 5,517 housing units).

In Chicago, one in every 3,754 housing units was in the foreclosure process. Riverside, California (one in every 4,098 housing units) and Birmingham, Alabama (one in every 4,649 housing units) followed.

Attom compiled foreclosure filings entered into the database collected from more than 3,000 counties in the previous quarter.

The increase in foreclosure activity is largely due to the government’s expired foreclosure moratorium, according to Attom’s report, but it doesn’t forecast a flood of distressed properties coming to the market.

Foreclosure starts increased nationwide. Lenders began the foreclosure process on 8,348 U.S. properties last month, a 27 percent jump from July and a 49 percent increase year over year. Sharga noted the figure is about one-third of what the figure was in August 2019, the last time when there was normal foreclosure activity before the pandemic outbreak.

For metro areas with more than 1 million residents, foreclosure starts were the highest in New York City with 486. In Chicago, there were 439 foreclosure starts and 401 foreclosure starts in Los Angeles.

The Biden administration had extended the nationwide foreclosure moratorium twice since February, banning lenders across the U.S. from foreclosing on homes in an effort to assist families impacted by the pandemic.

About 1.75 million homeowners, or about 3.5 percent of all homes, are in some sort of forbearance plan with their lenders, according to the Mortgage Bankers Association. Of those homeowners, minority and low-income neighborhoods, which have suffered disproportionately from the pandemic, are expected to see the worst fallout from the end of the foreclosure moratorium.






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