Your Guide to Foreclosure Statistics 2020 and Facts
- Foreclosure Filings Up 13 Percent in January 2020
- Foreclosure Starts Down, but Not Everywhere in January 2020
- Homes in Foreclosure Drop to 282,800 in Q1 2020
- Two-Thirds of Default Servicers Expect Increase in Foreclosure
- NY Calls for 90-Day Suspension of Foreclosures
- Foreclosures Suspended for 60 Days Nationwide
- 65% of Mortgages Protected by Government Suspension on Foreclosures
Foreclosure Filings Up 13 Percent in January 2020
The beginning of the year saw a considerable increase in foreclosure filings. The 60,085 in foreclosure represented a 13 month-over-month jump from December 2019 and a 7 percent year-over-year increase from January 2019.
One in every 2,270 properties in the United States received a foreclosure filing in January. The states with the worst foreclosure rates in January were:
- New Jersey (one in every 1,046 homes)
- Delaware (one in every 1,098 homes)
- Illinois (one in every 1,139 homes)
- Maryland (one in every 1,507 homes)
- Ohio (one in every 1,517 homes)
Other states fare much better with significant drops in foreclosure activity month-over-month. Foreclosures dropped 44 percent in Iowa, 28 percent in Oregon and Nevada, 24 percent in Louisiana, and 20 percent in Washington.
Foreclosure Starts Down, but Not Everywhere
At 26,858, foreclosure starts, when lenders start the foreclosure process on a property for the first time, were down less than one percent month-over-month in January 2020 and down 9 percent year-over-year.
This is just the national average, however. Some states saw significant increases in foreclosure starts, including:
- California (up 27 percent)
- Tennessee (up 21 percent)
- Georgia (up 14 percent)
- Illinois (up 9 percent)
- Ohio (up 3 percent)
The ATTOM Data Solutions “Foreclosure Activity Report” also found upticks in foreclosure starts in 75 of the 220 metro areas analyzed. The greatest year-over-year city-level foreclosure start increases were in:
- San Antonio, Texas (up 66 percent)
- Los Angeles, California (up 63 percent)
- Riverside, California (up 22 percent)
- Nashville, Tennessee (up 19 percent)
- Chicago, Illinois (up 14 percent)
Homes in Foreclosure Drop to 282,800 in Q1 2020
282,800 homes were in the process of foreclosure during the first quarter of 2020, according to the ATTOM Data Solutions “Q1 2020 Vacant Property and Zombie Foreclosure Report.”
That’s a 1.9 percent drop from Q4 2019. But over the same period, the number of “zombie” foreclosures (where the house is vacant) was up 3 percent. 8,700 of the total 282,800 homes in foreclosure were vacant.
“Zombie” foreclosures were a hallmark of the subprime mortgage crisis and the Great Recession. Despite the recent uptick, the trend clearly shows the number of these troubled properties decreasing.
5.8 percent of all foreclosures were vacant in Q4 2014. Since 2016, the number of unoccupied properties in the foreclosure pipeline has dropped by 53 percent.
Two-Thirds of Default Servicers Expect Increase in Foreclosure
According to Auction.com’s “2020 Default Servicing Insights” report, two-thirds of the nation’s largest bank and nonbank mortgage default servicers expect foreclosure and REO inflow to increase in 2020. 89 percent expect foreclosures and REO inflow to increase from government-insured loans.
And all of this was before the novel coronavirus COVID-19 was declared a pandemic.
NY Calls for 90-Day Suspension of Foreclosures
In response to the massive financial disruption caused by the coronavirus pandemic, the New York Department of Financial Services urged lenders to suspend mortgage payments and foreclosures for 90 days. The agency acknowledged that the suspension is not mandatory.
New York Governor Andrew Cuomo clarified the policy by stating that the state is not exempting borrowers from mortgage payments but aiming to adjust the mortgage to include the payments on the back end.
Foreclosures Suspended for 60 Days Nationwide
Borrowers whose mortgage loans are backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration are in luck. The federal agencies overseeing these loans announced that they are enacting a 60-day suspension of all foreclosures and evictions of homeowners with government-backed mortgages.
This policy applies to all primary residences, second residences, and residential properties with one to four units, whether they are single-family homes or condos.
Unfortunately, the move won’t provide relief for borrowers who are already facing foreclosure. Loan servicers can’t begin the foreclosure process until payments are 120 days late or more. Borrowers struggling to make mortgage payments are advised to contact their servicer and request a forbearance.
A forbearance allows a borrower to reduce the payment amount or stop making payments for a set period of time. Late fees are waived and credit reporting is suspended during forbearance.
65% of Mortgages Protected by Government Suspension on Foreclosures
With the announcement on Wednesday by the Department of Housing and Urban Development that single-family homeowners with FHA-backed mortgages would be protected from foreclosure or eviction until mid-May, 65 percent of all outstanding mortgages (worth a whopping $6.88 trillion) will be protected by the government.