Foreclosure filings, including default notices, scheduled auctions or bank repossessions, dropped 81 percent year over year to 27,016 filings, according to Attom Data Solution’s Q3 2020 U.S. Foreclosure Market Report. The number, which was also down 12 percent from the previous quarter, marks a new historic low in filings since Attom began tracking the data during the first quarter of 2008.
Foreclosure filings in September 2020 alone — which totaled 9,707 filings — were also down 80 percent from the previous year.
“Foreclosure activity has, for all intents and purposes, ground to a halt due to moratoria put in place by the federal, state and local governments and the mortgage forbearance program initiated by the CARES Act,” Rick Sharga, executive vice president of RealtyTrac, said in a statement. “But it’s important to remember that the numbers we’re seeing today are artificially low, even as the number of seriously delinquent loans continues to increase, and that we’ll see a significant — and probably quite sudden — burst of foreclosure activity once these various government programs expire.”
Foreclosure starts were down across the U.S. during the third quarter by 15 percent quarter over quarter and 81 percent year over year.
States that saw the greatest annual decreases in foreclosure starts included Pennsylvania (down 95 percent), Wisconsin (down 93 percent), Washington (down 93 percent), Maryland (down 91 percent) and Colorado (down 90 percent).
Metro areas that saw some of the greatest declines in foreclosure starts year over year included Washington, D.C. (down 91 percent), Philadelphia (down 90 percent), Cleveland (down 89 percent), Denver (down 89 percent), and Baltimore (down 88 percent).
States with the highest foreclosure rates during Q3 included South Carolina (one in every 2,339 housing units), Illinois (one in every 3,031), New Mexico (one in every 3,079), New Jersey (one in every 3,314) and Delaware (one in every 3,482).
At the metro level, the top three metros with the highest foreclosure rates included McAllen-Edinburg, Texas (one in every 1,134 housing units); Davenport, Iowa (one in every 1,346); and Shreveport, Louisiana (one in every 1,640).
Bank repossessions likewise dropped to a record low this quarter, down 22 percent from the second quarter and down 82 percent from one year ago to a total of 6,076 repossessions.
“We’ll certainly see more repossessions by lenders once the foreclosure moratoria have ended, but maybe not as many as people might expect,” Sharga said in a statement. “Given the record amount of homeowner equity — over $6.5 trillion — it seems likely that many homeowners in financial distress will opt to take advantage of strong demand among homebuyers and sell their property rather than risk losing it to a foreclosure auction.”
The average time spent to foreclose on a property increased 21 percent from the previous quarter — from 685 days in Q2 2020 to 830 days in Q3 2020. That number was down slightly from an average of 841 days in Q3 2019.