Q1 2022 Sets New Foreclosure High

Foreclosure activity rose in all 50 states in Q1 2022, with foreclosure starts and bank repossessions reaching their highest numbers in two years, according to ATTOM’s Q1 2022 Foreclosure Market Report.

A total of 78,271 U.S. properties had a foreclosure filing during Q1, up 39% from Q4 2021 and 132% YOY.

March alone saw 33,333 properties with foreclosure filings, up 29% from February and 181% YOY. It was the 11th straight month of YOY increases in foreclosure activity.

“Foreclosure activity has continued to gradually return to normal levels since the expiration of the government’s moratorium, and the CFPB’s enhanced mortgage servicing guidelines,” said Rick Sharga, executive vice president of market intelligence for ATTOM. 

“But even with the large year-over-year increase in foreclosure starts and bank repossessions, foreclosure activity is still only running at about 57% of where it was in Q1 2020, the last quarter before the government enacted consumer protection programs due to the pandemic.”

California had the largest number of foreclosure starts in Q1 (5,378), followed by Florida (4,707), Texas (4,649), Illinois (3,534), and Ohio (3,136).

The states with the highest foreclosure rates were New Jersey (one in every 792 housing units), Ohio (one in every 991 housing units), South Carolina (one in every 1,081 housing units), and Nevada (one in every 1,090 housing units).

Foreclosed properties had been in the foreclosure process for an average of 917 days, down 3% from 941 days in Q4 2021 and 1% from 930 days in Q1 2021.

“It’s likely that we’ll continue to see significant month-over-month and year-over-year growth through the second quarter of 2022, but still won’t reach historically normal levels of foreclosures until the end of the year at the earliest, unless the U.S. economy takes a significant turn for the worse,” Sharga added.

Overall, American homeowners are in a good position to avoid foreclosure. Delinquencies dropped in January to their lowest rate since at least January 1999 thanks to home price appreciation and the strong jobs market. More than 90% of the 8.1 million homeowners who sought forbearance protection during the pandemic have exited their plans. And struggling homeowners have historically high equity to help protect them.

However, the increase in foreclosures “also indicates that the economic, and especially employment recovery, is not complete. We lost 20.2 million jobs in April 2020 alone as the government imposed wide-ranging lockdowns and since then, the economy has added 18.8 million jobs back, but we’re still short of the pre-pandemic level,” Realtor.com senior economist George Ratiu told MarketWatch.