After three years of historically low foreclosure activity, the numbers are ticking upward again.
According to recent data from real estate tracking firm ATTOM, foreclosure filings rose in several states through the back half of the year, with some markets seeing double-digit percentage increases compared to the same period last year.
It's not a crisis—yet—but the trend is worth watching if you own a home or are thinking about buying one.
States like Florida, Illinois, and New Jersey are seeing the biggest jumps, while much of the Midwest and Mountain West remain relatively flat.
Much of the activity is concentrated in loans that were already delinquent before the pandemic-era forbearance programs ended.
Now that those safety nets are gone, some borrowers are running out of options.
Mortgage rates have hovered in the 6% to 7% range for most of the past two years, and home values in many metros have flattened or dipped slightly from their 2022 peaks.
That combination squeezes homeowners who bought at the top with adjustable-rate loans or who tapped home equity lines of credit when rates were lower.
When payments reset higher, budgets that were already tight can snap.
If you're worried about falling behind, the worst move is to ignore the mail.
Most lenders would rather work out a payment plan, loan modification, or short sale than take a property back—foreclosure is expensive and slow for them too.
Contact your servicer as soon as you sense trouble.
Nonprofit housing counselors approved by HUD offer free help and can negotiate on your behalf.
More distressed inventory means less competition and potentially better prices in some neighborhoods.
But foreclosed homes often sell as-is, with deferred maintenance and unclear title issues.
Budget for inspections, repairs, and a longer closing timeline.
A bargain isn't a bargain if it comes with a $20,000 roof.
When a landlord loses a property to foreclosure, tenants can face sudden eviction pressure or unresponsive management.
Federal protections require most tenants to get at least 90 days' notice, but the rules depend on the type of loan and who's servicing it.
If you get a notice, contact a local legal aid office immediately—many offer free representation.
Lending standards are tighter, most homeowners have real equity, and unemployment remains low.
But the safety net is thinner than it was a few years ago, and a single job loss or medical bill can tip a stretched household over the edge.
Our take: the rise in foreclosure filings is less a sign of a collapsing market and more a reminder that pandemic-era protections are over.
Final Thoughts
If your housing payment has crept above 30% of your take-home pay, now is the time to call your lender or a HUD counselor—not after the first missed payment turns into three.