This year has seen a massive jump in the number of foreclosure starts, as witnessed in the daily mortgage foreclosure notices in our local newspaper.
What is happening now is taking care of the backlog caused by moratorium protections that prohibited initiating foreclosure proceedings during the pandemic. Expect to see foreclosure increases throughout the year, but they are expected to remain below historically normal levels… by no means a red flag for housing market corrections.
Moratorium protections resulted in the lowest number of foreclosure filings since this data was tracked on a national level. You can see these numbers reflected in the percent of distressed sales in the Twin Cities in the chart below. Only 0.4% of Twin Cities area home sales were foreclosures or short sales in 2021, significantly below even the 2003 low level of 0.7%.
Millions of people got mortgage forbearance during the pandemic, got back on their feet and have ended their forbearance. But there are some who may continue to be suffering financial hardships, more likely to end up in foreclosure.
According to ATTOM, licensor of the nation’s most comprehensive foreclosure data, US foreclosure filings in February 2022 were up 129% from February 2021… the seventh consecutive month with an annual increase in completed foreclosures. But these numbers are still about 60% lower than 2019, before the pandemic began.
Nationwide, Minnesota ranked 37th in foreclosure rates for February 2022. The counties with the highest foreclosure rates were Wright, Rock, Washington, Pipestone, and Murray.
Sharlene Hensrud, RE/MAX Results – shensrud@homesms.com
