Chicago Foreclosure Activity Shows No Signs of Spike

Chicago Foreclosure Activity Shows No Signs of Spike
Chicago foreclosure activity is back on trendline, but not
may exceed it

At the end of last week ATTOM released Midyear The 2022 US Foreclosure Market Report basically shows that the pandemic did not have a lasting impact on the foreclosure market. In the graph below, the first half of the year was about the same as his first half of 2020, with 2020 being depressed by the foreclosure moratorium.

1H US Foreclosure Activity by Year

US foreclosure activity has returned to pre-pandemic levels

Still, ATTOM’s executive vice president of market intelligence, Rick Sharga, thinks it can go a little further.Overall foreclosure activity remains well below historical averages, but a dramatic increase in foreclosure initiations suggests a return to normal levels is likely by early 2023. ”

i think he is wrong. He’s already back to normal. First, he must be calling his 2019 normal. This is probably due to the moratorium he imposed in the first half of 2020. Also, the “dramatic” increase in foreclosure starts he speaks of is compared to his 2021, which was very depressed by the moratorium. In fact, foreclosure openings were still artificially depressed in 2020, he only increased by 19% from the first half of 2020.

Rick goes on to argue the exact opposite.

It’s important to note that many of the foreclosure initiations we see today, in fact much of the overall foreclosure activity we see today, are on loans that have already been foreclosed or that have been 120 days or more past due. . Pandemic. Many of these loans were either protected by government moratoriums on foreclosure or should have already been foreclosed two years ago. There is little truly new delinquent or default activity in the numbers we track.

Okay… I mean, he says there isn’t much evidence that foreclosures are increasing. For example, delinquency. And that’s right. Black Knight’s May 2022 Mortgage Monitor report shows that new lows in delinquency rates are regularly being recorded. The May interest rate was only 2.75%, only slightly higher than the April interest rate.

black knight mortgage delinquency rate

The country’s mortgage delinquency rate continues to improve, appearing to have fully recovered from the pandemic and reaching new lows since the data were tracked.

Again, Illinois has the highest foreclosure rate of any state, and the Chicago metropolitan area ranks among the top five in the nation. Monthly data for the City of Chicago is plotted below going back to 2009 and broken down by foreclosure stage. We can see a steady decline over time, but no signs of an imminent revival. In fact, we are now below pre-pandemic levels. Defaults are about the same level as they were before the pandemic.

Chicago Foreclosure Activity

After a dramatic plunge following the pandemic’s foreclosure moratorium, Chicago foreclosure activity has begun to rebound now that the moratorium has ended.

As a side note, ATTOM’s foreclosure market report shows that the time it takes to complete a foreclosure remains ridiculously high.

Average number of days to complete foreclosure

The average time to complete a foreclosure is pretty close to an all-time high.

The number of Chicago homes that have been foreclosed has been steadily increasing over the past 12 months, but very slowly as you can see in the chart below. I don’t think this will have much of an impact on the real estate market as there is nothing to be particularly excited about.

Foreclosure Chicago House

The number of homes being foreclosed in Chicago fell under a moratorium during the pandemic and doesn’t appear to have increased much since.

#foreclosure #chicago foreclosure #coronavirus

Gary Lucido is president of Lucid Realty, a Chicago-area full-service real estate brokerage that offers homebuyer rebates and discounted commissions. If you’d like to stay up to date on the Chicago real estate market, or want an insider’s take on the underside of the real estate industry, he can subscribe to Getting Real by Email using the form below. Once you receive the confirmation notification, be sure to verify your email address.

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