According to a recent ATTOM Data Solutions report, foreclosure filings increased both month-over-month and year-over-year as of January 2022. The data from ATTOM’s U.S. Foreclosure Market Report suggests that the housing boom is continuing.
That said, what are foreclsoure numbers looking like this year? Are they stable, on the rise, or on their way down?
Foreclosures Spike in Early 2022
Property repossessions jumped 29% in January 2022 from the month before and 139% from the same time last year to reach total of 23,204 properties with foreclosure filings.
Foreclosures are usually lower over the holiday season, but this year, increases in foreclosures are being driven by the fact that the CFPB expired at the end of 2021.
What is Foreclosure?
Foreclosure is process whereby a lender repossesses a property after a homeowner is unable to pay their mortgage and defaults on the home loan. When a borrower misses a mortgage payment, the mortgage becomes delinquent. This is the point at which the foreclosure process starts.
The lender will notify the homeowner in default, and three to six months after the first missed mortgage payment, the lender will start to foreclose (as long as the borrower has not made up those payments within a certain grace period and the mortgage is still delinquent).
Buyers Should Be Careful When Buying Foreclosures
Homebuyers often look to foreclosures in an effort to get a good deal on a home purchase. Houses bought while in stages of foreclosure can usually be purchased at a lower price, which is one reason why foreclosed homes equal 25% of all home re-sales.
However, just because a foreclosed home cost less to purchase does not mean that it will save you money in the long-run. Foreclosed houses are usually sold as-is and can be in much less than perfect shape. Fixing up a foreclosed home may cost you more than you bargained for and you may find a better deal in another home elsewhere.
The process of buying a foreclosed home is different than other homes, so be sure to consult an expert before purchasing.
Related: How to Avoid Foreclosure
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