U.S. Foreclosures Hit All-Time Low in January

CARES Act mortgage forbearance program stalling the foreclosure pipeline

According to ATTOM Data Solutions January 2021 U.S. Foreclosure Market Report, there were a total of 9,702 U.S. properties with foreclosure filings -- default notices, scheduled auctions or bank repossessions -- down 11 percent from a month ago and 80 percent from a year ago.

"January foreclosure activity declined at least in part due to the Biden Administration's decision to continue the foreclosure moratorium on government-backed loans through the end of March," said Rick Sharga, RealtyTrac executive vice president. "The moratorium and CARES Act mortgage forbearance program have effectively prevented millions of seriously delinquent loans from entering the foreclosure process. But it's important to remember that the number of foreclosures we're seeing right now doesn't reflect market reality - and that's something we'll need to deal with once these government programs expire."

Foreclosure completion numbers continue decline

Lenders repossessed 1,428 U.S. properties through completed foreclosures (REOs) in January 2021, down 28 percent from last month and down 86 percent from last year - thirteenth consecutive annual decline in completed foreclosures.

States that saw an annual decrease in REOs in January 2021 included: Illinois (down 86 percent); Florida (down 83 percent); Maryland (down 83 percent); California (down 82 percent); and Texas (down 82 percent).

Those major metropolitan statistical areas (MSAs) with a population greater than 200,000 that saw the greatest number of REOs included: Birmingham, AL (124 REOs); Chicago, IL (65 REOs); Baltimore, MD (41 REOs); Miami, FL (40 REOs); and Beaumont, TX (38 REOs).

Highest foreclosure rates in Delaware, Louisiana and Florida

Nationwide one in every 14,164 housing units had a foreclosure filing in January 2021. States with the highest foreclosure rates were Delaware (one in every 4,923 housing units with a foreclosure filing); Louisiana (one in every 6,581 housing units); Florida (one in every 7,920 housing units); Indiana (one in every 8,668 housing units); and Alabama (one in every 8,707 housing units).

Among the 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in January 2021 were Lake Charles, LA (one in every 2,050 housing units with a foreclosure filing); Birmingham, AL (one in every 3,053 housing units); Lafayette, LA (one in every 3,492 housing units); Provo, UT (one in every 3,631 housing units); and Beaumont, TX (one in every 3,871 housing units).

Other than Birmingham, among the metropolitan areas with a population greater than 1 million, those with the worst foreclosure rates in January 2021 included: Jacksonville, FL (one in every 5,657 housing units); Cleveland, OH (one in every 5,660 housing units); Miami, FL (one in every 6,867 housing); and Louisville, KY (one in every 7,541 housing units).

Foreclosure starts increase monthly in 17 states

Lenders started the foreclosure process on 5,235 U.S. properties in January 2021, down 12 percent from last month and down 80 percent from a year ago.

Counter to the national trend, some states saw increases in foreclosure starts from last month including: Washington (up 63 percent); Virginia (up 54 percent); North Carolina (up 32 percent); Massachusetts (up 21 percent); and Ohio (up 10 percent).

Among the 220 metropolitan statistical areas with a population of at least 200,000 and at least 100 or more foreclosure starts in January 2021, those that saw double digit annual declines, included: Chicago, IL (down 87 percent); New York, NY (down 85 percent); Los Angeles, CA (down 80 percent); Dallas, TX (down 77 percent); and Houston, TX (down 69 percent).