February jump in foreclosure filings to set pattern for next half-year

February’s foreclosure filings and starts rose slightly from January and markedly from a year ago as they continued to transition away from pandemic-related constraints, according to Attom, an industry data provider.

Total filings — which are comprised of default notices, bank repossessions and scheduled auctions — jumped to 25,833, up 11% from the previous month and 129% from February of last year.

Those double- and triple-digit percentage gains in foreclosure activity will likely recur in the next six months, said Rick Sharga, executive vice president at Attom company RealtyTrac, in a press release.

“This isn’t an indication of economic turmoil or weakness in the housing market, it’s simply the gradual return to normal levels of foreclosure activity,” he said.

At 16,545, foreclosure starts also rose during the past month. That number was up 40% from the previous month and 176% from a year earlier. Starts were highest in the following states: California, 1,868; Florida, 1,527; Texas, 1,488; Illinois, 1,168; and Ohio, 1,144.

The state where foreclosures were most prevalent in February was New Jersey. In that state one out of every 2,510 housing units had a foreclosure, compared to 5,230 nationwide. Rounding out the top five in this category and their respective denominators were Illinois (2,125), Ohio (2,801), South Carolina (3,001), and Nevada (3,112).

Foreclosure completions were the one type of activity tracked by the report that slowed month-to-month, suggesting catch-up actions related to a pre-pandemic overhang of distressed loans, according to Sharga. At 2,634, that number was down 45% from January, but up 70% from a year earlier.

“We can expect more month-to-month volatility as servicers and the court systems work through some of these backlogs,” Sharga said.