Published by REALTOR.com | June 9, 2023
The number of homeowners receiving a foreclosure filing spiked in May, causing many to draw uncomfortable parallels with the Great Recession.
The number of homeowners receiving a dreaded foreclosure filing spiked in May.
About 1 in every 4,000 homes had a foreclosure filing in May, according to a recent report from real estate data firm ATTOM. Foreclosure filings shot up 7% from April and were up 14% year over year.
This might cause folks to draw uncomfortable parallels with the Great Recession, especially as home prices have been falling as buyers have been backing away from the housing market. However, many of these filings are a result of the federal moratorium suspending foreclosures during the worst of the COVID-19 pandemic when millions of Americans were out of work.
While the federal moratorium ended in 2021, many states extended it. Now, homeowners who have been late on their mortgage payments for the past few years are being served with foreclosure notices.
Throughout the country, nearly 35,200 properties were under threat of foreclosure. ATTOM looked at data from more than 3,000 counties making up more than 99% of the country’s population to come up with its findings. Foreclosure filings included default lis pendens (pending legal actions), auction, trustee sale, and foreclosure sale notices. Bank-owned properties were also included.
“A lot of people just can’t afford the house they’re in,” says Paul Urich, a bankruptcy attorney who handles foreclosures in Orlando, FL. “Everything’s become so expensive, and a lot of these folks are trapped in variable-rate mortgages so their payments keep going up and up. Then we have the issue with homeowners insurance where every time we get a storm, [the insurance companies] either cancel or raise the prices. The creditors are getting over COVID, and they’re not cutting any more slack.”
