31% increase in homes facing foreclosure each year as moratorium ends

(Illustration by Kevin Cifuentes of iStock, The Real Deal)

The number of pre-foreclosure properties has increased for the second consecutive quarter since the nationwide moratorium on foreclosures was lifted at the end of July and is up 31% for the year.

About 230,000 homes nationwide are in the process of foreclosure, up 31% from the first quarter of 2021 and up 3% from the previous quarter, according to a report from real estate database Attom.

Of those, just over 7,000 are zombie properties, meaning they are abandoned. That number could rise slightly as lenders seek 1.5 to 2 million homeowners when the moratorium ends, but thanks to rising house prices, experts say: The increase is not significant, at least for now.

Attom Chief Product Officer Todd Teta said: “But the rosy picture is in danger again.”

The consolation for homeowners struggling to pay is that their property values ​​have risen and there is little left on their mortgages.Low interest rates and a shortage of supply have pushed home prices past 1 Increased by more than 10% year-on-year. According to Rick Sharga, executive vice president of his RealtyTrac subsidiary, Attom, this should prevent homeowners from leaving their property.

“The zombie state is most likely to be during the lengthy foreclosure process. should be able to sell your home at a profit before the process gets too long,” says Sharga.

The Northeast and Midwest states have the highest number of zombie properties.

“If the number of zombie properties spikes, it could happen in states like New York, Illinois, and Florida,” Sharga said. “Judicial seizures in these states are often delayed by court backlogs, and the seizure process can take him over 1,000 days.”

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