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.
Government and private-sector relief programs allowed borrowers with financial difficulties to delay their monthly payments for up to 18 months. The missed payments could then be tacked on to the end of the loan period or repaid when the home was sold or the mortgage refinanced.
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