Foreclosures have fallen precipitously because of the CARES Act — which paused foreclosures on federally backed mortgages, which make up the majority of home mortgages in the country — as well as various state and local actions preventing foreclosures, according to ATTOM Data Solutions, which owns a foreclosure listings portal.
Multiple auctions underway at once during the monthly foreclosure auction hosted by Harris County at the Bayou City Events Center, Tuesday, Oct. 2, 2018 in Houston. During the pandemic, Harris County Judge Lina Hidalgo has often closed the center on foreclosure auction days, citing health risks due to COVID-19.
Only 27,000 foreclosure filings were posted in the third quarter, down from the pre-COVID quarterly average of 279,000.
“Foreclosure activity has, for all intents and purposes, ground to a halt due to moratoria put in place by the federal, state and local governments and the mortgage forbearance program initiated by the CARES Act,” said Rick Sharga, executive vice president of ATTOM’s foreclosure listings portal, RealtyTrac. “But it’s important to remember that the numbers we’re seeing today are artificially low, even as the number of seriously delinquent loans continues to increase, and that we’ll see a significant — and probably quite sudden — burst of foreclosure activity once these various government programs expire.”
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Texas, which does not have state or local bans on foreclosures, saw foreclosures fall by a smaller percentage than the nation did: a 75 percent year-over-year decrease, compared to an 81 percent year-over-year decrease. However, ATTOM’s data, which measured default notices, scheduled auctions and bank repossessions, did not take into account cancelled auctions. In Harris County, thousands of properties that have been scheduled for auction have not been foreclosed upon because the auctions have been repeatedly canceled due to social distancing concerns.
One Texas metropolitan area, McAllen, ranked first out of the 220 regions analyzed in the report for foreclosure rates. There, one in 1,134 housing units had a foreclosure filing in the third quarter.