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Foreclosures soar after COVID-19 forbearance programs expire

Foreclosures soar after COVID-19 forbearance programs expire
The report said the most new foreclosures during the third quarter were seen in Florida (5,400), Illinois (3,600), Texas (3,000), Ohio (2,600), New Jersey (2,100) and New York (2,000).  File Photo by Alexis C. Glenn/UPI | License Photo

Oct. 14 (UPI) -- Foreclosures in the United States are up dramatically nationwide now that emergency measures to help people stay in their homes have begun to expire, an industry report said Thursday.

According to mortgage data firm ATTOM, new foreclosures, or starts, rose by 32% from July to October compared to the April-July period -- and were up 67% compared to the same period in 2020.

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While the increases are dramatic, the report says they are particularly pronounced because new foreclosures have been exceptionally low since the start of the COVID-19 pandemic due to emergency aid programs that staved off foreclosures for millions of homeowners.

Those programs have begun to expire and the market is seeing an uptick in starts as a result, the report said.

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Typically, new foreclosures in the United States average around 40,000 per month. When the aid programs were in effect, that figure was under 5,000.

Thursday's report showed 19,600 foreclosures in September, which was an increase of 24% from August and 102% from September 2020.

RealtyTrac executive vice president Rick Sharga said starts are still "far below" historical levels.

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"September foreclosure actions were almost 70% lower than they were prior to the COVID-19 pandemic in September of 2019, and [third quarter] foreclosure activity was 60% lower than the same quarter that year," he said.

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"Even with similar increases in foreclosures over the next few months, we'll end the year significantly below what we'd see in a normal housing market."

The report said the most new foreclosures from July to October were seen in Florida (5,400), Illinois (3,600), Texas (3,000), Ohio (2,600), New Jersey (2,100) and New York (2,000).

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