The tidal wave of foreclosures that everyone feared in 2020 never fully arrived, thanks to stimulus checks and mortgage forbearance programs.
But the safety net is gone, and the numbers are starting to shift.
According to recent data from real estate tracking firm ATTOM, foreclosure filings jumped in several states last quarter compared to the same time last year.
While we are nowhere near 2008 levels, the trend is worth watching if you own a home or are behind on payments.
The states seeing the biggest spikes are not the usual suspects like Florida or Nevada.
Instead, the sharpest increases are showing up in the Midwest and parts of the South.
Indiana, Ohio, Illinois, South Carolina, and Texas topped the list for rising foreclosure activity.
In some of these markets, filings are up double digits year over year.
Housing counselors say the common thread is homeowners who burned through their savings keeping up with rising property taxes, insurance premiums, and everyday costs.
The answer is a pileup of small pressures rather than one big crash.
Home insurance rates have climbed in storm-prone states, property taxes jumped after home values soared, and credit card debt hit record highs.
When a furnace dies or a car transmission goes, many families no longer have a rainy day fund to cover it.
One missed payment turns into two, and the bank eventually starts the process.
The good news is that foreclosure is not an overnight event.
Even after you miss a few payments, you usually have months before a sale date is set.
If you get a notice from your lender, do not ignore it.
Ask specifically about "loss mitigation" options, which is bank-speak for ways to avoid foreclosure.
That can include a repayment plan, a loan modification, or a short sale where you sell for less than you owe.
If you are struggling, reach out to a HUD-approved housing counselor.
These are free or low-cost nonprofit advisors, not salespeople.
You can find one at the Department of Housing and Urban Development website or by calling 800-569-4287.
They can help you talk to your lender and understand paperwork that often feels designed to confuse.
Avoid any company that demands an upfront fee to "save" your home.
For buyers, this uptick means a few more distressed properties may hit the market in the coming year.
But do not expect a flood of cheap fixer-uppers.
Lenders are still cautious, and many homeowners have enough equity to sell normally rather than go through foreclosure.
If you are shopping, keep an eye on county auction lists and real estate owned (REO) listings, but bring a contractor and a patient budget.
These homes often need work and sell as-is.
The pandemic-era safety net is gone, and the bills are real again.
If your housing payment feels like a stretch every month, now is the time to make a plan, not after the first late notice arrives.
Final Thoughts
A quick call to your lender or a free counselor today can save you a world of stress tomorrow.