US foreclosures near pre-COVID level, NJ 4th highest in August
Although activity has not fully returned, a gradual build-up after the lifting of COVID-19 moratoriums revealed that the nationwide lockdown is starting at 86% of their August 2019 levels last month, according to ATTOM’s latest report. DataSolutions.
Rick Sharga, executive vice president of market intelligence at ATTOM, said the caveat to those numbers is that August 2019 was an unusually slow month in that year, but New Jersey is actually a bit ahead of the national curve.
Indeed, the Garden State recorded foreclosure filing for 2,441 homes last month, the fourth highest rate in the United States after Illinois, Delaware and South Carolina.
Sharga suggested that new foreclosures may not flatten out for some time.
“We’ll probably see foreclosure start-up activity continue to increase a bit,” he said. “New Jersey is actually on par with early lockdown activity as of August 2019.”
This is largely because some “new” repos are actually reboots of ones from a few years ago.
So if a state had a high foreclosure rate before the early 2020 shutdown, chances are it still has one now.
“We have finally moved on from a two-year government intervention program and exhaustive efforts by mortgage companies to try to prevent any foreclosures that may have been linked to the COVID pandemic,” Sharga said. “In the case of New Jersey, there was a fairly large backlog of badly delinquent or already foreclosed loans before the government moratorium was put in place.”
Other actions may actually drive the rate down, according to Sharga.
Whether an owner can refinance or successfully sell their property for a profit before having it repossessed by the government are the determining factors here.
“We expect foreclosure auctions to actually be reduced compared to previous cycles, and the number of repossessed properties will likely be a bit lower as well,” Sharga said.
According to the ATTOM report, these foreclosures by lenders through completed foreclosures, known as REOs, were up 28% in August compared to July.
As always, Sharga said those numbers were high in New Jersey because of its gap between New York and Philadelphia, and those two metro areas were among the top five in the U.S. in REOs in August.
Patrick Lavery is a reporter and anchor for New Jersey 101.5. You can reach him at [email protected]
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