Recent reports indicate an upward trend in foreclosure filings across the nation, with Florida marking the highest number. This trend has provoked wide-ranging analysis of the causes, with experts attributing the increase to factors like the fallout from the COVID-19 pandemic and mounting living costs.
Rising Tide of Foreclosures
Foreclosure data analytics firm ATTOM recently reported a 7% monthly and 14% yearly rise in U.S. foreclosure filings. The findings suggest an ongoing trend of increased foreclosure activity, a pattern that has been observed throughout the year. Rob Barber, ATTOM CEO, stated, “This upward trajectory suggests the possibility of continued heightened activity, and with foreclosure completions seeing the largest monthly increase this year, we will continue to monitor the potential impacts this may have on the housing market.”
In May 2023, foreclosure filings, including default notices, scheduled auctions, or bank repossessions, totaled 35,196 properties nationwide. Florida led the states, recording nearly 3,000 home foreclosures – a significant increase from the previous month and year.
Nationwide, more than 35,000 Americans failed to make their payments in May. Illinois, Maryland, and New Jersey registered the highest foreclosure rates. Florida also topped the list in foreclosure starts with 2,901 filings.
Reasons for the Increase
COVID-19 is considered a key factor behind the surge in foreclosures. There was a backlog of cases during the pandemic, as many foreclosures were paused. Realtors and brokers, such as Jeff Lichtenstein of Echo Fine Properties and Good Greek Realty’s Spero Georgedakis, believe that the drying up of government incentives is causing people to face real financial difficulties.
Foreclosure Impacts and Predictions
Despite the recent increase in foreclosure filings, experts advise that the situation isn’t as dire as it may appear. The current levels of foreclosure are far from those witnessed during the 2008 housing crisis. Also, unemployment rates are currently low, with Jeff Lichtenstein adding, “In the ‘08-‘13 market, there was a lot of unemployment, people lost their jobs at that time, and none of those things are going on right now.”
However, the trend is not to be completely dismissed. Spero Georgedakis of Good Greek Realty advises, “We should always get concerned whenever you see an increase in a red flag area like foreclosures.” Experts forecast rates to return to pre-COVID numbers by year’s end.
Avoiding the Foreclosure Wave
As foreclosures are on the rise, homeowners are encouraged to take preventive measures. There are HUD-approved housing counseling agencies that provide free foreclosure avoidance counseling. For assistance, homeowners can contact HUD at 888-995-HOPE.
Homeowners should be aware of potential scams. HUD recommends not paying any money to anyone promising foreclosure avoidance without a written agreement and not until all promised services are completed. Furthermore, homeowners should beware of predatory lending. Companies asking for a fee in advance or advising homeowners to stop paying their mortgage lender and pay them instead are often fraudulent. Homeowners who are uncertain about the legitimacy of an offer should check with a HUD counselor.
The rise in foreclosure filings across the country, led by Florida, calls for both scrutiny and precaution. The impacts of the pandemic, coupled with other economic factors, have stressed the financial situations of many homeowners. Although experts maintain that the current situation is not comparable to the 2008 housing crisis, they also caution that the trend should not be overlooked. Therefore, it is crucial for homeowners to understand their situation and seek advice from trusted sources such as HUD-approved counseling agencies. For more detailed data on U.S. foreclosure trends, visit ATTOM’s website.