The State of Foreclosures

The highs: August 2022 marks the eighth consecutive month of increases in initial foreclosure filings since CFPB’s foreclosure moratorium ended on January 1, 2022. Connecticut recorded three times as many loans in this stage in August (3,211 filings) than in January 2020, prior to both the onset of the pandemic and the enaction of the foreclosure moratorium. As of August, 0.2% of all homes in the state were in the initial foreclosure filing stage, more than double the rate of Massachusetts.

The lows: For the second month in a row, over 200 Connecticut homes moved to the final stage of foreclosure (NFS). Just 31 of those homes sold back to the servicer (REOs) in August, or 2.3% of the 1,338 REO sales in January 2020.

The highs: Delaware saw another month-over-month increase of homes in LIS in August, for the eighth consecutive month. The number of homes in the initial foreclosure stage was 77% higher than pre-pandemic levels and has risen faster than in neighboring Maryland, where initial filings were up just 24% over pre-pandemic levels.

The lows: Initial filings in Delaware jumped by more than a third since the foreclosure moratorium ended, yet NFS filings are not happening at the same rate. As of August, 120 homes had moved into NFS, less than half of pre-pandemic levels. Similarly, servicers bought back only 10 homes in foreclosure (REOs) in August, just 2.7% of the pre-pandemic volume.

The highs: Illinois continues to have one of the highest rates of foreclosure filings in the nation. In August, 370 properties were repossessed by the lender (REOs), double the July rate. The same month, 18,658 homes moved into initial foreclosure filings, 19% above pre-pandemic rates.

The lows: Auction scheduling has steadily fallen to less than half the pre-pandemic level, suggesting an increase in resolutions of delinquencies or a buildup in the backlog of auctions.

The highs: Maryland had LIS filings on 2,501 homes in August, the fourth consecutive month of increases and 63% above of pre-pandemic levels.

The lows: While NFS filings rose 22% in August over July and remain at the highest level since the pandemic, they are 66% below pre-pandemic levels. Maryland’s total August foreclosure activity (from initial filings to repossession by the servicer at auction) was almost a third of Delaware’s and just over half that of Pennsylvania’s. In August, just 45 auction sales transferred homes back to the mortgage loan servicer, or 1.7% of pre-pandemic volume.

The highs: Initial foreclosure filings continue to rise in Massachusetts with 2,800 homes at this stage in August, over 30% above pre-pandemic levels.

The lows: Prior to the pandemic, the volume of homes in the NFS stage and the number of auctions resulting in sales back to the loan servicer was about two thirds the volume of homes in the initial filing stage. However, that rate is now about 11%.

The highs: Michigan, a state with no initial foreclosure filing requirement, has seen a steady rise in NFS filings from 700 homes in January 2022 to 2,148 in August, almost matching the pre-pandemic level.

The lows: This upturn has not increased servicer buyback sales (REOs). At just 191 REOs in August, the current level is less than 5% of the 4,069 homes in REO in January 2020.

The highs: New Jersey has one of the highest concentrations of foreclosure activity in the country. In August, 23,857 homes, or one in every 158, were in the initial foreclosure stage.

The lows: While New Jersey’s foreclosure filing rate eclipses neighboring Pennsylvania with one in every 550 homes, it’s only 5.2% higher than pre-pandemic levels and has not risen dramatically since January of this year. August saw just 111 foreclosure sales resulting in loan servicer buybacks versus over 4,000 REO sales in January 2020. If this year’s foreclosure filings eventually translate to an uptick in REO sales, it may take a while as New Jersey has one of the slowest foreclosure processes in the country.

The highs: Initial foreclosure filings in August rose for the eighth consecutive month, and, at 16,214 homes, Ohio’s rate topped pre-pandemic levels by 26%, the equivalent of one in every 323 homes.

The lows: The number of homes in the final NFS stage hit 1,337 (37% below pre-pandemic levels) and only 119 auctions resulted in repossession (97% below pre-pandemic rates). The number of homes in the final NFS stage decreased for the second month in a row.

The highs: The number of Pennsylvania homes in the initial foreclosure filing stage rose for the eighth consecutive month to 10,258 homes, 18% higher than pre-pandemic levels.

The lows: NFS filings dropped for the second month in a row to 1,785 homes, 64% below pre-pandemic levels. Foreclosure sales resulting in servicer buyback stood at 11 transactions, just 3.3% of pre-pandemic levels. Pennsylvania has a slow foreclosure process — 914 days on average — so it may take some time for initial foreclosures to work their way through the system.

No highs, only lows: Rhode Island’s foreclosure activity remains well below pre-pandemic levels. Only 136 homes were in the NFS stage, and only six properties went to the loan servicer at auction. Both figures are off their pre-pandemic marks (by 51% for NFS and 96% for REO).

Note: Measured per housing unit, Rhode Island’s August foreclosure numbers — one in every 3,555 housing units — were less than three times the Massachusetts rate (one in 1,071) and seven times below Connecticut (one in 477). Rhode Island’s numbers remained low even after Housing Assistance Fund applications closed in March 2022. 

The highs: Despite low NFS levels, Wisconsin’s REO sales were higher than several states with significantly more housing units, such as Pennsylvania and New Jersey. Most notably, the number nearly equaled Ohio’s figure of 119 REO sales.

The lows: Wisconsin’s foreclosure filings continue to trend downward with 1,279 homes in initial foreclosure in August, 41% below pre-pandemic levels. Only 405 homes were in the final stage (41% lower) and 117 homes in REO sales (85% lower).