Foreclosure Statistics + 10 FAQs

01.09.2021
Milena

If you miss several mortgage payments, possession of the mortgaged property goes to the lender. This process, called foreclosure, is among the scariest things that can happen to homeowners. Not everything is terrible, however. The latest foreclosure statistics reveal that the number of foreclosures has dropped significantly — from 50,000 foreclosures in January 2020 to 10,000 in December 2020. Have you ever wondered about the states with the highest foreclosure rate, though? And do you know the average property foreclosure time? Find the answers to these and other relevant questions below.

Foreclosure Statistics (Editor’s Choice)

  • There were 214,323 foreclosure filings in the US in 2020.
  • Between 2010 and 2020, the US foreclosure rate dropped from 2.23% to 0.16%.
  • Delaware had the highest foreclosure rate by state in 2020.
  • In Q4 2020, the average foreclosure process lasted 857 days.
  • Average foreclosures take an average of 2,186 days in Hawaii.
  • Iowa has the highest rate of 15.52% of ‘zombie’ foreclosure filings.
  • There were approximately 3.8 million foreclosures during the Great Recession.

Foreclosure Stats and Trends

1. There were nearly 215,000 foreclosure filings in the United States in 2020.

ATTOM Data Solutions reported that throughout 2020, there were 214,323 foreclosure filings stateside. This marks a 57% drop from 2019. Compared to 2010, when there were almost 2.9 million foreclosure filings, the decrease is an impressive 93%.

(ATTOM Data Solutions)

2. Delaware had the highest foreclosure rates by state in 2020.

The state’s foreclosure rate in 2020 was 0.33%. Delaware was closely followed by New Jersey and Illinois, whose foreclosure filing rates were 0.31% and 0.30%, respectively. Maryland and South Carolina round up the top five states with the highest foreclosure rate in 2020. Foreclosure statistics by state show that the percentages of houses with foreclosure filings in these states were 0.26 and 0.24.

(ATTOM Data Solutions)

Highest Foreclosure Rate by State

3. In 2020, the Peoria, Illinois metro area had the highest rate of houses with foreclosure filings.

This metropolitan area with a 200,000 or more population led the way, with 0.48% of its housing units having a foreclosure filing. This metro area is followed by Rockford, Illinois, and Trenton, New Jersey. In the first city, the foreclosure rate was 0.44%, and foreclosure statistics in NJ set Trenton’s rate at the same level. Two other metropolitan areas with over 200,000 residents and high foreclosure rates by city in 2020 were Atlantic City, New Jersey (0.40%), and McAllen, Texas (0.35%).

(ATTOM Data Solutions)

4. Manteca, California, saw the highest annual increase in the number of properties with foreclosure filings.

According to ATTOM Data’s foreclosure statistics, this ZIP code saw its foreclosure filings skyrocket in 2020, marking a 210% increase compared to 2019. Tracy, California, is another location whose number of foreclosures significantly jumped year-over-year (177%). College Station, Texas, and Stockton, California, saw their house foreclosures increase by 167% and 164%. Lodi, California, rounds up the list of locations with the highest increase in foreclosure filings by state with 145%.

(ATTOM Data Solutions)

5. In Q4 2020, it took an average of over 850 days for foreclosures to complete.

More precisely, it took an average of 857 days for current foreclosures to conclude, foreclosure statistics reveal. This figure represents a 3% increase compared to the results for Q4 2019. In Q3 2020, the average foreclosure process lasted 830 days, while in Q2, it was much shorter at 658 days. Meaning, in only two quarters, the average number of days needed to complete United States foreclosures jumped by 30.24%.

(ATTOM Data Solutions)

6. Hawaii has the longest foreclosures.

ATTOM Data Solutions went a step further and analyzed the foreclosure data by state. In Q4 2020, Hawaii topped the list thanks to its extremely lengthy foreclosure process of 2,186 days on average. In New York and Kentucky, such processes lasted an average of 1,465 and 1,390 days, foreclosure stats show. The other two states with the longest foreclosure processes were Pennsylvania and Massachusetts. In these states, it took an average of 1,275 and 1,223 days for foreclosures to complete. None of these destinations appears among the jurisdictions with the most foreclosures by state.

(ATTOM Data Solutions)

Foreclosure Average Completion Time

7. The foreclosure rates in the US have been declining since 2010.

In 2006, the nation’s rate stood at 0.58%, still higher than the 0.51% recorded in 2017. It, however, has been decreasing ever since 2010. At the time, it stood at a high 2.23%. United States foreclosure statistics show that it drastically dropped to 1.45% one year later and kept going down. In 2019, it reached an all-time low of 0.36%, while in 2020, it dropped even further to only 0.16%.

(Statista)

8. There were nearly 10,000 foreclosure filings in August 2020.

In August 2020, there were a total of 9,889 foreclosure filings in the United States. This figure was up by 11% compared to July 2020 but down by 81% compared to August 2019. That month’s rate was over 0.007% nationwide, meaning that one in every 13,791 properties had a foreclosure filing. About 5,599 properties started the process of foreclosure in August. US foreclosure trends show that this represents a 24% month-on-month jump and a year-on-year drop of 80%.

Other ATTOM Data Solutions reports show that the number of foreclosures increased in October 2020. That month, there were a total of 11,673 foreclosures, while in December 2020, the figure dropped to 10,876. December’s results revealed an 8% month-on-month increase and an 80% year-on-year fall in total foreclosures.

(ATTOM Data Solutions)

Number of Foreclosures by Month

9. Shreveport, LA, was the metropolitan area with the highest foreclosure rates in August 2020.

According to the ATOOM Data Solutions report on foreclosure trends in the United States, Shreveport, LA, was the metropolitan area with the worst results. In this metro area, one in every 3,253 homes had a foreclosure filing, resulting in a foreclosure rate by city of over 0.0307%.

Here are the other four metropolitan areas with the highest foreclosure rates in August 2020:

  • Ocala, FL – 1 in every 3,283 (0.0304%)
  • Cedar Rapids, IA – 1 in every 3,429 (0.291%)
  • Lakeland, FL – 1 in every 3,516 (0.0284%)
  • McAllen, TX – 1 in every 3,535 (0.0282%)

As for metropolitan areas with over 1 million population, Jacksonville, FL, leads the way with 1 in every 5,877 homes with foreclosure filings. The repossession rate in the metro area in August 2020 was 0.017%, show the foreclosure statistics.

The other metropolitan areas with over 1 million residents and the highest foreclosure rates that month were:

  • Baltimore, MD – 1 in every 5,988 (0.0167%)
  • Philadelphia, PA – 1 in every 6,557 (0.0152%)
  • Louisville, KY – 1 in every 6,600 (0.0151%)
  • Miami, FL – 1 in every 6,757 (0.0147%)

(ATTOM Data Solutions)

10. Iowa has the highest ‘zombie’ property foreclosure rate by state.

Zombie properties are vacant properties where nobody lives. In Q4 2020, there were 1.6 million such residential properties in the USA. Meaning, only one of every 13,100 homes in the States are vacant. Foreclosure stats suggest that 7,612 US properties facing foreclosure are ‘zombie’ properties. Meaning about 3.8% of homes in the foreclosure process have been vacated by owners.

Here are the states with the highest zombie properties with foreclosure filings rate for Q4 in 2020:

  • Iowa – 15.52%
  • Kentucky – 11.98%
  • Missouri – 10.22%
  • Georgia – 9.56%
  • Maryland – 9.17%

(PRNewswire, ATTOM Data Solutions)

11. In 2016, the USA foreclosure rate was over 7%.

Between 2000 and 2016, the mortgage foreclosure rate on subprime conventional loans in America moved between 3.3% and 14.7%. A national foreclosure rate of 3.3% was recorded in 2005, whereas the rate was the highest in 2011. According to foreclosure statistics by year, about 7.2% of conventional subprime loans resulted in foreclosure in 2016.

(Statista)

12. Vermont has the lowest number of foreclosures by state.

With less than five foreclosures a month, Vermont boasts having the least foreclosures by year and month. West Virginia has about five monthly foreclosures, while Nebraska’s are about 10. Oregon and DC are two other states with under 10 foreclosures a month. These states also have low foreclosure rates by year and month.

The same can’t be said about Florida, California, and Texas. Florida has about 1,500 foreclosures a month, while California foreclosure statistics reveal about 1,000 monthly repossessions in the state. About 800 homes are foreclosed a month in Texas.

(RealtyTrac)

13. Nearly half of active foreclosure homes in America have ‘auction’ foreclosure status.

According to RealtyTrac’s latest data, 46.7% of active foreclosures have the ‘auction’ status. Over one-third of all active foreclosures, or about 35.2%, are in the process’s pre-foreclosure step. The remaining 18.1% are bank-owned.

(RealtyTrac)

14. Curtailment of income was the top reason for foreclosure.

So what is the biggest cause of foreclosure? The answer is money, of course. In 2007, curtailment of income was the main reason for 58% of foreclosures, reasons for foreclosure statistics show. Medical issues and illness contributed with 13%, according to national foreclosure data. Divorce and inability to sell the house made up 8% and 6% of foreclosures, respectively. Only 1.4% of foreclosures resulted from payment adjustment on a mortgage. Americans also listed job loss, relocation, and death of a family member as common foreclosure reasons.

(HowStuffWorks)

Reasons for Foreclosure

15. Foreclosures on the rise in Canada.

Our foreclosure data by country shows that foreclosures in Alberta, Canada, have been on the rise. Between April 2016 and March 2017, the region saw 5,746 foreclosed properties. Foreclosure statistics for Canada show that 2,277 of the foreclosures were in Calgary, while the number of foreclosures in Edmonton totaled 2,523. During the same period in 2015 and 2016, the number of foreclosed properties in Canada was lower at 4,556 and 3,675, respectively. 2018 reports meanwhile show that the rate of mortgage arrears has been increasing in all regions. The Atlantic Region and Alberta led the way here with rates of 0.56% and 0.45%.

(Global News)

16. The number of repossessed homes in the UK has been decreasing.

The UK’s foreclosure statistics show a positive trend in the total number of repossessions. For the first quarter of 2021, the number of mortgage possession claims, orders, warrants and repossessions by county court bailiffs slumped by a massive 85% year-on-year. While this huge drop was largely on account of the COVID-19 pandemic, the number of repossessions in the UK has been declining since 2008, data on the number of foreclosures by year shows. Overall, the UK has excellent results when it comes to foreclosure rates by country.

(Gov.uk)

FAQs

Can I stop a foreclosure by paying the past due amount?

When a homeowner pays the past due amounts in a single lump payment, they reinstate the mortgage loan and stop the foreclosure process. According to USA foreclosure statistics, current foreclosure rates are at an all-time low, meaning Americans are learning how to prevent foreclosures from completing.

Why are foreclosed homes so cheap?

There are several reasons for that. First, banks want to sell such properties fast and list them for below-market-value prices. Second, foreclosed properties often are poorly maintained, damaged, and sometimes occupied by squatters, which lowers their value. Finally, many need lots of construction and investment before becoming usable again.

How long can a foreclosure be delayed?

There are several reasons for that. First, banks want to sell such properties fast and list them for below-market-value prices. Second, foreclosed properties often are poorly maintained, damaged, and sometimes occupied by squatters, which lowers their value. Finally, many need lots of construction and investment before becoming usable again.

How long can a foreclosure be delayed?

The latest foreclosure stats show that the average foreclosure completion takes 857 days. Yet, borrowers can postpone repossession for about six months only. Moreover, the slowing down of the process varies significantly and depends on the borrower’s overall situation.

Can you live in a foreclosed home for free?

People living in foreclosed properties have time between receiving the foreclosure notification and the property sale. Meaning, they usually can keep living there during that time. The period may last anything between two and twelve months. When a vacant house is foreclosed, squatters sometimes use it to live there rent-free. This isn’t legal, and the new owners often need legal eviction to remove said squatters from foreclosed properties. National foreclosure statistics show that 7,612 foreclosed homes in the US are vacant.

How bad does foreclosure hurt your credit?

Foreclosures are among the credit score factors that can seriously damage your rating. A foreclosure can hurt good credit scores by up to 100 points and excellent credit ratings by up to 160 points. Foreclosures appear in credit reports within 30-60 days and stay there for seven years.

How many foreclosures were there during the Great Recession?

If you think America has a high foreclosure rate today, look at the Great Recession figures. Between 2007 and 2010, there were about 3.8 million foreclosed properties stateside, foreclosure statistics reveal. In 2008, when the historical foreclosure rates were the highest, repossession filings jumped by 81%.

Should you buy a foreclosure?

It depends on the property and the offer. To ensure that you’re not overpaying, you should always research property prices in that area. It’s also essential to get the property inspected to establish how much money will go for renovations. 

Many foreclosed houses tend to be poorly maintained, damaged, and dirty. So, it usually takes time and money to make them usable again. With the United States foreclosure rates declining, the offer of repossessed homes is lower than ever before.

How fast can Chapter 13 stop foreclosure?

When you file Chapter 13 bankruptcy, foreclosures are automatically stopped. This isn’t a permanent solution as you still must agree on a repayment plan. To negotiate such a plan, you must meet specific requirements and prove that you can make timely payments. In any case, Chapter 13 can buy you time to deal with your mortgage default and save your home. Foreclosure trends lately have been positive, and it seems that people have been using Chapter 13 in their favor.

What are mortgage delinquency rates?

Mortgage delinquency rates represent the rate of mortgage loans with delinquent payments. Loan delinquency is missing payments for at least 30 days. So, mortgage delinquency rates show how many mortgage loans have late or missed payments. High mortgage delinquency rates usually point to negative foreclosure trends.

What happens to a second mortgage in a foreclosure?

When there is a foreclosure on a first mortgage, all other liens are extinguished and removed from the title. The debt from the second mortgage, however, remains. Second mortgage holders can pay off the first mortgage debt, or exercise cure or redemption rights.

Final Thoughts

The latest US foreclosure statistics show that the number of repossessed homes in the country has been declining. That’s some hopeful foreclosure data for Americans who plan to get a mortgage and invest in a home. However, with the global economic crisis created by the COVID-19 pandemic, it’s possible to see foreclosure rates increase in both the US and worldwide.

References: ATTOM Data Solutions, Statista, ATTOM Data Solutions, PRNewswire, Statista, Realty Trac, HowStuffWorks, Global News, Gov.uk

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