Foreclosure Calm Before the Coronavirus Housing Market Storm Begins

U.S. Home Foreclosures Reached an All-time Record Low in February 2020

According to ATTOM Data Solutions' February 2020 U.S. Foreclosure Market Report, there were a total of 48,004 U.S. properties with foreclosure filings -- default notices, scheduled auctions or bank repossessions -- the lowest number of total foreclosure filings recorded since being tracking in April 2005.

"Foreclosure activity across the United States hit new lows in February, yet another marker of the nation's long housing boom," said Todd Teta, chief product officer with ATTOM Data Solutions. "However, as with just about anything connected to the housing market right now, the foreclosure situation is now totally in flux because of the ever-evolving coronavirus pandemic. Many lenders have suspended foreclosure proceedings, so the numbers will most likely continue to drop in the coming months. But after that, we may see an uptick in foreclosures as a result of dramatic economic impacts, such as more homeowners losing their jobs and falling behind on mortgage payments."

Foreclosure completion numbers continue annual decline

Lenders repossessed 10,469 U.S. properties through completed foreclosures (REOs) in February 2020, up 1 percent from last month but down 8 percent from last year - the second consecutive annual decline in completed foreclosures.

States that saw an annual decrease in REOs in February 2020 included: Florida (down 47 percent); New Jersey (down 37 percent); New York (down 18 percent); Texas (down 16 percent); and Maryland (down 13 percent).

Those major metropolitan statistical areas (MSAs) with a population greater than 200,000 that saw the greatest number of REOs included: Chicago, IL (614 REOs); Riverside, CA (529 REOs); New York, NY (446 REOs); Los Angeles, CA (368 REOs); and Philadelphia, PA (328 REOs).

Highest foreclosure rates in New Jersey, Illinois and Delaware

Nationwide one in every 2,841 housing units had a foreclosure filing in February 2020. States with the highest foreclosure rates were New Jersey (one in every 1,457 housing units with a foreclosure filing); Illinois (one in every 1,507 housing units); Delaware (one in every 1,628 housing units); South Carolina (one in every 1,688 housing units); and Maryland (one in every 1,713 housing units).

Among the 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in February were Bakersfield, CA (one in every 948 housing units with a foreclosure filing); Atlantic City, NJ (one in every 1,032 housing units); Columbia, SC (one in every 1,042 housing units); Rockford, IL (one in every 1,049 housing units); and Fayetteville, NC (one in every 1,089 housing units).

Those metropolitan areas with a population greater than 1 million, with the worst foreclosure rates in February 2020 included: Riverside, CA (one in every 1,109 housing units); Chicago, IL (one in every 1,314 housing units); Philadelphia, PA (one in every 1,391 housing units); Cleveland, OH (one in every 1,469 housing units); and Baltimore, MD (one in every 1,605 housing units).

Foreclosure starts increase monthly in 20 states

Lenders started the foreclosure process on 27,058 U.S. properties in February 2020, up 3 percent from last month but down 9 percent from a year ago -- the thirteenth consecutive month showing an annual decline. 

States that saw double digit increases in foreclosure starts from last month included: Nevada (up 63 percent); Oregon (up 49 percent); Washington (up 47 percent); Texas (up 28 percent); and Michigan (up 20 percent).

Counter to the national trend, 31 states including Washington, DC posted month-over-month decreases in foreclosure starts in February 2020, including Minnesota (down 38 percent); Tennessee (down 26 percent); Virginia (down 19 percent); New York (down 15 percent); and Ohio (down 13 percent).