U.S. Bank Repossessions Reach New Low While Foreclosure Rates Tick Up

Inman News

U.S. bank repossessions dropped by 6% in August to a total of 2,035 properties foreclosed on by lenders, while foreclosure filings rose by 11%.

U.S. bank repossessions (REOs) fell 6 percent in August from the previous month to a total of 2,035 properties foreclosed on by lenders, according to Attom Data Solutions. That number was also down 82 percent year over year, marking the lowest level of U.S. REOs since Attom began tracking the data in 2005.

In July REOs hit a then-low of 2,163 properties foreclosed on by lenders, according to Attom.

“While foreclosure activity remains over 80 percent below 2019 totals, there was a significant increase in foreclosure starts in August compared to July,” said Rick Sharga, executive vice president at RealtyTrac, an online marketplace for foreclosed and defaulted properties. “Several states — including Florida and New York — that have had foreclosure moratoria in place have recently loosened some of their restrictions, which may explain the unexpected bump in the monthly numbers.”

States that saw the greatest number of REOs in August included California (183 REOs filed), Illinois (165 REOs filed), Pennsylvania (157 REOs Filde), Tennessee (144 REOs filed) and Texas (141 REOs filed).

Metro areas of 1 million residents or more with the highest number of REO filings in August included Philadelphia (142 REOs filed); New York City (142 REOs filed); Chicago (102 REOs filed); Baltimore (75 REOs filed); and Los Angeles (43 REOs filed).

Meanwhile, in August a total of 9,889 U.S. properties had foreclosure filings — including default notices, scheduled auctions or bank repossessions —  an increase of 11 percent from the previous month. However, that figure was still down 81 percent from one year ago.

As federal and state foreclosure moratoria put in place as a result of the coronavirus pandemic have begun to expire or loosen restrictions, August numbers have begun to reflect changes in policy.

On a national level, one in every 13,791 housing units had a foreclosure filing in August. States with the highest foreclosure rates included South Carolina (one in every 6,798 housing units), Florida (one in every 7,338 housing units), Iowa (one in every 7,924 housing units), Maryland (one in every 8,435 housing units) and New Mexico (one in every 9,145 housing units).

In metro areas with a population greater than 1 million, the highest foreclosure rates were in Jacksonville, Florida (one in every 5,877 housing units); Baltimore (one in every 5,988 housing units); Philadelphia (one in every 6,557 housing units); Louisville, Kentucky (one in every 6,600 housing units); and Miami (one in every 6,757 housing units).

Foreclosure starts also increased from the previous month, by 24 percent, but were still down 80 percent from August 2019. States that saw double-digit monthly increases in foreclosure starts included Florida, New York, Indiana, Mississippi and New Jersey.

“Many courthouses across the country have been closed or have had their caseloads dramatically reduced during the pandemic,” Sharga said in a statement. “It will be interesting to see if foreclosure starts continue to increase as these courthouses begin to re-open.”