New foreclosure filings increase in May

Local properties with new foreclosure filings increased in May.  The number of new filings was low compared to some pre-pandemic activity. Still, it was an increase from both the previous month and May last year when filings were at a record low due to the implementation of the foreclosure moratorium and CARES Act mortgage forbearance program.

 There were 15 new filings in the nine the NE Tenn. counties included in ATTOM Data Solution’s May Foreclosure Market Report.  May last year had 10 new filings and 11 in April. New filings include default notices, scheduled auctions, or bank repossessions.

There were two county-level exceptions. Sullivan and Washington Co. Va. filings decreased from the May 2020 level.

Local new filings follow the national 23% (12,700 properties) year-over-year increase. The regional local increase was up 50% from May last year.

“While the (national) increase in foreclosure activity is significant, it’s important to keep these numbers in perspective,” said RealtyTrac Executive Vice President Rick Sharga. Since last year’s new filings were so low, the May year-over-year numbers look a lot more dramatic than they are.

Here are May’s new filings compared to May last year:

Greeneville – 2, up from 0.

Carter – 5, up from 0.

Unicoi – 0, no change.

Washington Tenn. – 2, up from 0.

Hawkins – 1, up from 0.

Sullivan – 4, down from 8.

Bristol, Va. – 0, no change

Scott – 0, unchanged.

Washington, Va. – 1, down from 2.

Four of the regional new filings were bank repossessions. Eleven were notices of trustee sales. Carter Co. led the region on the number of trustee sales notices (8). Sullivan Co. had the most repossessions (2).

At the same time, the number of new foreclosure filings increased the number of mortgages in forbearance fell for the 15th consecutive week to 4.04%. That would account for about 3,600 local properties in forbearance.

The decline was steeper than in previous weeks. It was probably the result of many borrowers reaching their 15-month expiration date, according to Mike Fratantoni, chief economist for the Mortgage Bankers Association (MBA).

According to a Housing Wire report, despite the overall forbearance volume, there is still some concern about borrowers who have been in a program the longest. According to Fratantoni, the MBA is seeing an increase in the share of forbearances exits where borrowers do not have a loss mitigation plan. Without it, the entire amount of missed payments could be due as soon as an individual exists the program.

Experts do not expect the exits will drive a big increase in foreclosures since mortgaged properties in forbearance built equity during the run-up in home prices. That could give those in the program leverage for a short sale increase of foreclosure.

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Categories: REAL ESTATE

1 reply

  1. More foreclosures to come as the free money dries up! Next will be the repossessions of autos, boats and campers. And then…bankruptcies.

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