The Big Foreclosure Story? There Aren’t Many – Yet

ATTOM: In January 2021, Florida. foreclosures were down 83% year-to-year, in part due to the foreclosure moratorium, which “doesn’t reflect market reality.”

ATTOM Data Solutions’ January 2021 U.S. Foreclosure Market Report found a total of 9,702 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – a drop from 11% from a month earlier and 80% from a year ago.

In Florida, the number of REO properties was down 83% year-to-year in January.

 “January foreclosure activity declined at least in part due to the Biden Administration’s decision to continue the foreclosure moratorium on government-backed loans through the end of March,” says Rick Sharga, RealtyTrac executive vice president. “The moratorium and CARES Act mortgage forbearance program have effectively prevented millions of seriously delinquent loans from entering the foreclosure process.”

But Sharga adds that the current numbers don’t “reflect market reality – and that’s something we’ll need to deal with once these government programs expire.”

In the final half of the Great Recession, many homes went into foreclosure, but many also had no equity – or negative equity. In the current pandemic-led downturn, housing values have hit record highs, and many homeowners who can’t make their monthly payments or refinance may still have equity in their homes. In those cases, they might prefer a short sale rather than a foreclosure if they can’t work out an agreement with their lender.

Even as foreclosures bottom out, however, Florida remains one of the top states for activity. According to ATTOM, the states with the highest foreclosure rates were Delaware (one in every 4,923 housing units had a foreclosure filing), Louisiana (one in every 6,581 housing units), Florida (one in every 7,920 housing units), Indiana (one in every 8,668 housing units) and Alabama (one in every 8,707 housing units).

Miami also made the list for “major metropolitan statistical areas (MSAs) with a population greater than 200,000 that saw the greatest number of REOs,” even though the numbers aren’t high. The list includes Birmingham, Alabama (124 REOs); Chicago (65 REOs); Baltimore, (41 REOs); Miami (40 REOs); and Beaumont, Texas (38 REOs).

Source: Florida Realtors®