Foreclosure Activity Increases Just Slightly In May, Signaling A Steady Climb Back To Normal

The 30-to-89 days mortgage delinquency rate can be an early indicator of the mortgage market's ... [+] overall health.

Getty Images

Foreclosure filings were up 1% from a month ago but up 185% from a year ago, according to a new report from ATTOM, a real estate data provider. As a result, there were 30,881 properties with foreclosure filings — default notices, scheduled auctions or bank repossessions.

One in every 4,549 housing units had a foreclosure filing in May nationwide. States with the highest foreclosure rates were Illinois (one in every 2,000 housing units with a foreclosure filing); New Jersey (one in every 2,346 housing units); Delaware (one in every 2,426 housing units); Ohio (one in every 2,667 housing units); and Florida (one in every 2,788 housing units).

“While there’s some volatility in the monthly numbers, foreclosure activity overall is continuing its slow, steady climb back to normal after two years of government intervention led to historically low levels of defaults,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “But with inflation now at a 41-year high, and runaway prices on necessities like food and gasoline, we may see foreclosure activity ramp up a little faster than most forecasts suggest.”

Among the 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in May 2022 were Jacksonville, North Carolina (one in every 1,052 housing units with a foreclosure filing); Cleveland (one in every 1,389 housing units); Chicago (one in every 1,777 housing units); Fayetteville, North Carolina (one in every 1,823 housing units); and Rockford, Illinois (one in every 1,861 housing units).

Those metropolitan areas with a population greater than 1 million, with the worst foreclosure rates in May 2022, including Cleveland and Chicago, were Jacksonville, Florida (one in every 1,985 housing units); Orlando, Florida (one in every 2,295 housing units); and Miami (one in every 2,432 housing units).

Lenders started the foreclosure process on 22,099 properties in May 2022, down 1% from last month but up 274% from a year ago.

States that had the greatest number of foreclosure starts in May included Florida (2,483 foreclosure starts); California (2,238 foreclosure starts); Texas (2,019 foreclosure starts); Illinois (1,757 foreclosure starts); and Ohio (1,285 foreclosure starts).

Those major metropolitan areas with a population greater than 1 million and that had at least 100 foreclosure starts in May 2022 and saw increases from April 2022 included: Miami (up 81%); Washington, D.C. (up 60%); Birmingham, Alabama (up 56%); Cincinnati (up 54%); and Jacksonville, Florida (up 54%).

“It’s interesting that there were almost 10 times more foreclosure starts than foreclosure completions,” Sharga added. “This suggests that financially distressed borrowers may be finding ways to avoid losing their home to a foreclosure sale.”

Lenders repossessed 2,857 properties through completed foreclosures (real estate-owned properties or REO) in May 2022, up 117% from last year.

States that had the greatest number of REOs in May 2022, included: Illinois (350 REOs); Michigan (249 REOs); Pennsylvania (226 REOs); New Jersey (175 REOs); and Ohio (146 REOs).

Those major metropolitan statistical areas with a population greater than 1 million that saw the greatest number of REOs in May 2022 included: Chicago (289 REOs); New York (133 REOs); Detroit (124 REOs); Philadelphia (98 REOs); and Pittsburgh (79 REOs).