The Foreclosure Wave That Wasn’t

Of all the economic upheavals brought on by the pandemic, a surge of home foreclosures wasn’t one of them.

Instead of the wave some had feared, there was barely a trickle in 2021, according to an analysis by ATTOM Data, a real estate data firm. Indeed, as the chart below shows, the 151,153 foreclosure filings across the country last year were a record low according to ATTOM data going back to 2005. 

It was no surprise that there were relatively few foreclosures early in the pandemic since a government ban on foreclosures for many types of home loans expired only in July, and many homeowners were in special pandemic forbearance programs that allowed them to skip payments without penalty for up to 18 months. While the number of foreclosure filings did tick up in the fall, it wasn’t the crisis that some had feared. 

“The COVID-19 foreclosure tsunami that some people had anticipated is clearly not happening,” Rick Sharga, executive vice president at RealtyTrac, an ATTOM company, said in a report on the figures.

For perspective, filings in 2021 represented 0.11% of all housing units, down from 0.36% in 2019—the last pre-pandemic year—and a peak of 2.23% in 2010, during the fallout from the financial crisis.

Among the reasons the wave was averted, according to ATTOM Data’s analysis: Programs by banks and the government to allow financially distressed homeowners to modify their mortgages have been successful. 

Not only that, but rapidly increasing home prices have meant homeowners who get behind on payments could sell their homes and walk away with some money instead of facing foreclosure. 

Sharga said he expects foreclosures could pick back up to normal levels by the end of the year. 

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