Foreclosure activity dipped near term even as relief measures ended

The number of homes moving toward the distressed sales market in November was down from the previous month, but up from a year ago, according to Attom Data Solutions’ latest numbers.

At 10,471, foreclosure starts were down 3% on a consecutive-month basis from 10,759 in October but up 99% from 5,256 a year ago.

The near-term drop in starts — which followed an uptick the previous month — bodes well for loan performance, according to Rick Sharga, executive vice president of Attom affiliate RealtyTrac.

“We’re seeing from a number of different reports that the hundreds of thousands of borrowers exiting forbearance are continuing to do well after they’ve left the program,” he said in an interview.

Seasonal slowing, servicers’ progress in clearing out pre-pandemic backlogs, and transitional foreclosure protections put in place by the Consumer Financial Protection Bureau all also likely played a role in the reversal of the prior uptick in starts, said Sharga.

“When we saw increased activity in August, September and October, I think it reflected servicers moving quickly on loans that were in the foreclosure process before the moratorium. They’ve worked their way through a large percentage of that by now,” he said.

Attom’s data also shows that properties with foreclosure filings — including default notices, scheduled auctions or bank repossessions — were down from the previous month but up from a year ago.

These totaled 19,479 during November, representing a drop of 5% from 20,587 in October and an increase of 94% from the 10,042 a year earlier. Compared with October, real-estate owned activity fell by 24% to 2,292 from 3,027 and notices of default declined by 4%, falling to 6,319 from 6,572. The number of scheduled auctions inched down by just 1% to 10,868 from 10,988 during that time frame, while the number of scheduled auctions inched down by just 1% to 10,868 from 10,988. Notices of default and scheduled auctions were roughly twice as high as a year ago, when foreclosure bans and forbearance were still largely in place, and REO activity was up by 15%.

The state with the highest foreclosure rate in November was Illinois, where one out of every 3,187 housing units had a filing. In comparison, only one in every 7,055 housing units in the United States had a foreclosure filing in November. Rounding out the top five states with the highest foreclosure rates were Florida, Ohio, Delaware and New Jersey.

Among metropolitan areas with a population of 200,000 or more, the region with the highest foreclosure rate was Cleveland, where one out of every 1,756 housing units had a filing.