BAM Key Details:
- ATTOM released its Year-End 2022 U.S. Foreclosure Market Report, which shows double the amount of foreclosure activity compared to 2021.
- Foreclosure starts are up year-over-year but still below pre-pandemic levels.
- Bank repossessions are down 70% from 2019 and down 96% from 2010.
ATTOM has released its Year-End 2022 U.S. Foreclosure Market Report, which shows double the amount of foreclosure activity compared to a year ago.
Foreclosure starts are up year-over-year but still below pre-pandemic levels. And far fewer foreclosures are ending in bank repossessions, which are down 70% compared to 2019 and down 96% from 2010 levels.
Here’s what you need to know about foreclosures in 2022.
ATTOM’S YEAR-END 2022 U.S. FORECLOSURE MARKET REPORT
ATTOM’s report shows foreclosure filings—including default notices, scheduled auctions, and bank repossessions—on 324,237 U.S. properties in 2022. This is an increase of 115% compared to 2021 but down 34% from 2019, before the pandemic took effect on the market.
Foreclosure filings were also 89% fewer than the 2010 peak of nearly 2.9 million.
The 324,237 properties with foreclosure filings account for 0.23% of total U.S. housing units, up from 0.11% in 2021 but lower than 0.36% in 2019—and down from the 2010 peak of 2.23%.
Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic. It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.
ATTOM bases the number of properties with foreclosure filings on publicly recorded and published filings from over 3,000 counties nationwide—representing more than 99% of the total U.S. population.
ATTOM’s report includes new data for December 2022, showing 30,882 properties with foreclosure filings—up less than 1% from the previous month but up 72% year over year.
BANK REPOSSESSIONS DOWN 70% FROM 2019
Even with the increase in foreclosure filings, far fewer of them are resulting in bank repossession compared to 2019—and especially compared to 2010.
Lenders repossessed 42,854 U.S. properties through foreclosures (REO) in 2022. This is:
- 67% more than in 2021, but
- 70% fewer than in 2019 (143,955), and
- 96% fewer than the 2010 peak of 1,050,500.
States with the highest number of REOs in 2022:
- Illinois: 5,518 REOs
- Michigan: 3,669
- Pennsylvania: 2,741
- New York: 2,405
- California: 2,223
Metros with populations greater than one million with the highest number of REOs in 2022:
- Chicago, Illinois: 3,545 REOs
- Detroit, Illinois: 2,135
- New York, New York: 1,656
- St. Louis, Missouri: 1,395
- Philadelphia, Pennsylvania: 1,302
Unlike foreclosure activity during the Great Recession, the majority of homes in foreclosure are not being repossessed by lenders. Our recent homeowner equity report shows that 93 percent of borrowers in foreclosure today have positive equity, which they appear to be leveraging in order to avoid a foreclosure by refinancing their mortgage or selling the property at a profit. It seems likely that this is a trend that will continue in 2023.
FORECLOSURE STARTS RISING NATIONWIDE
U.S. lenders initiated the foreclosure process on 248,170 properties in 2022—169% more than 2021 but 26% fewer than 2019—and 88% fewer than 2009’s peak of 2,139,005.
States with the highest numbers of foreclosure starts in 2022:
- California: 27,269 foreclosure starts
- Texas: 23,151
- Florida: 22,968
- Illinois: 16,941
- Ohio: 13,469
Five states went counter to the national trend, showing an increase in foreclosure starts compared to 2019:
- Indiana: up 81%
- Michigan: 10%
- Idaho: up 8%
- Colorado: up 2%
- Minnesota: up less than 1%
Metros with populations greater than one million that saw the highest numbers of foreclosure starts in 2022:
- New York, NY: 15,821 foreclosure starts
- Chicago, IL:14,360
- Los Angeles, CA: 8,185
- Philadelphia, PA: 7,286
- Miami, FL: 7,090
HIGHEST STATE FORECLOSURE RATES
Illinois, New Jersey, and Delaware top the list of states with the highest foreclosure rates in 2022.
- Illinois: 0.49% of housing units with a foreclosure filing
- New Jersey: 0.45%
- Delaware: 0.40%
- Ohio: 0.38%
- South Carolina: 0.37%
- Nevada: 0.34%
- Florida: 0.33%
- Indiana: 0.30%
- Maryland: 0.27%
- Michigan: 0.26%
HIGHEST METRO FORECLOSURE RATES
Among 223 metro areas with populations of at least 200,000, those with the highest foreclosure rates in 2022:
- Cleveland, OH: 0.70% of housing units with a foreclosure filing
- Jacksonville, NC: 0.58%
- Atlantic City, NJ: 0.58%
- Columbia, SC: 0.55%
- Chicago, IL: 0.53%
Metros with populations greater than one million—including Cleveland, OH, and Chicago, IL—with the highest foreclosure rates in 2022:
- Philadelphia, PA: 0.43%
- Las Vegas, NV: 0.42%
- Jacksonville, FL: 0.42%
AVERAGE DURATION OF FORECLOSURE PROCESS IS DOWN QUARTERLY AND ANNUALLY
Properties in foreclosure in Q4 2022 spent an average of 852 days in the foreclosure process—4% less than the previous quarter and 9% less than a year ago.
States with the longest average duration for the foreclosure process in Q4 2022:
- Hawaii: 2,546 days
- New Jersey: 2,041 days
- Louisiana: 1,925 days
- New York: 1,828 days
- Pennsylvania: 1,692 days
HIGH-LEVEL TAKEAWAYS FROM Q4 AND DECEMBER 2022 FORECLOSURE ACTIVITY
In the fourth quarter of 2022, a total of 90,715 U.S. proprieties had foreclosure filings—2% fewer than in the previous quarter but 61% more than a year ago. Nationwide, one in every 1,549 properties had a foreclosure filing.
States with the highest foreclosure rates in Q4 2022:
- Illinois: one in every 724 housing units with a foreclosure filing
- Delaware: one in every 848
- New Jersey: one in every 860
- South Carolina: one in every 950
- Ohio: one in every 1,035
In December 2022 alone, one in every 4,558 U.S. properties had a foreclosure filing. States with the highest foreclosure rates that month:
- South Carolina: one in every 2,301 housing units with a foreclosure filing
- New Jersey: one in every 2,378
- Illinois: one in every 2,399
- Delaware: one in every 2,535
- Ohio: one in every 3,027
In the same month, 21,023 properties started the foreclosure process—2% more than the previous month and 129% more than a year ago. Lenders completed the process on 3,663 properties—3% fewer than the previous month but 21% more than a year ago.
ATTOM’S REPORT METHODOLOGY
The ATTOM U.S. Foreclosure Market Report provides an accounting of the total number of properties nationwide with at least one foreclosure filing registered in the ATTOM Data Warehouse during a specific month and quarter—in this case the fourth quarter and final month of 2022.
Some filings during Q4 may have been recorded in the previous quarter (Q3 2022). If more than one filling has been entered into the database for a particular property, only the most recent filing is included in ATTOM’s report.
ATTOM’s report accounts for documents filed for all three phases of foreclosure:
- Default — Notice of Default (NOD) and Lis Pendens (LIS)
- Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS)
- Real Estate Owned or REO properties (foreclosed on and repossessed by a bank)
All foreclosure reports—annual, mid-year, quarterly, and monthly—check if the same type of foreclosure document was previously filed against a specific property. If so—and if that previous document was filed within the estimated foreclosure time frame for the state where the property is located, the report does not count the property in the current month, quarter, or year.
TOP TAKEAWAYS FOR REAL ESTATE AGENTS
If any past clients of yours are now struggling to pay the mortgage, provide them with information on their best options—including how they can leverage their equity to resolve the issue and avoid repossession.
You can also help them attract buyers if selling their home is the best option for them. And, depending on the situation, if a traditional sale isn’t feasible, consider reaching out to a local property investor, even if it means reducing the home’s list price (with the seller’s consent) to facilitate a quick sale.