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IPFS News Link • Housing

Foreclosures are surging now that Covid mortgage bailouts are ending, but they're still at low..

• by Diana Olick

Foreclosure starts jumped 32% in the third quarter of this year from the second quarter and were 67% higher than the third quarter of 2020.
The foreclosure numbers should stay relatively low because of aggressive modifications by lenders and also because of high levels of home equity.

Foreclosures are starting to surge as government and private sector programs designed to help homeowners deal with the economic fallout of the Covid-19 pandemic have begun to expire.

Mortgage lenders began the foreclosure process on 25,209 properties in the third quarter, a 32% increase from the second quarter. On a year-over-year basis, it's a 67% increase from the third quarter of 2020, according to ATTOM, a mortgage data firm.

While the increases in foreclosures are dramatic, they are coming off extreme lows that were created by the forbearance programs. New foreclosures, also known as starts, usually number around 40,000 per month. They fell to as low as 3,000 to 4,000 in the first year of the pandemic, when forbearance programs were in full force.