Cleveland leads the nation in new foreclosure filings

CLEVELAND — New numbers show the nation’s foreclosure rate is on the rise, with Ohio being one of the states with the biggest increase and Cleveland number one among all major cities.

ATTOM, parent company of RealtyTrac, the largest online marketplace for foreclosures and distressed properties, released its U.S. foreclosures market report for the first quarter of 2022. It revealed that one in 1,795 homes in the nationally had foreclosure filed in the first quarter, while in Ohio the number was nearly double with 1 in 991 homes, which was the third highest in the nation behind Illinois and New Jersey.

Among American cities with more than 200,000 inhabitants, Cleveland leads with 1 in 535 dwellings.

Nationwide, foreclosures in March were up 181% from a year ago. A major factor is the end last August of the federal moratorium on foreclosures, leaving homeowners who suspended payments during the pandemic to deal with late payments.

“During the pandemic, many federal government programs aimed at ensuring the economy remains strong have disappeared and many experts say that is in particular why we are seeing an increase in foreclosures,” said Michael Goldberg. , from Case Western’s Weatherhead School of Management.

Another major factor hitting struggling homeowners right now, he says, is simply inflation.

“People who pay more at the pump or at the grocery store for groceries and gas to get to work have to make very tough decisions about where their scarce dollars go and they fall behind on their payments. mortgages.”

Unfortunately, the Federal Reserve is trying to keep inflation under control by raising interest rates, which is causing yet another problem for some struggling homeowners.

“Certainly for people who might be able to refinance their mortgage and get lower rates and therefore a lower monthly payment, that ship has sailed and it will probably be some time before we see lower rates,” Goldberg said.

Another factor to watch going forward, he said, as those interest rates rise, is the impact of that on those who financed with adjustable rate mortgages, or ARMs.

“It also might not be right now, but as we move forward into 2022 as people’s rates go up, it’s going to cost them more and it could have an even bigger impact on foreclosures.”

A total of 50,759 U.S. properties entered the foreclosure process in the first quarter of 2022, up 67% from the previous quarter and 188% from a year ago.

“Foreclosure activity has continued to gradually return to normal levels since the expiration of the government moratorium and enhanced CFPB mortgage service guidelines,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “But even with the sharp year-over-year increase in foreclosures and bank foreclosures, foreclosure activity is still only operating at around 57% of what it was in the first quarter of 2020, the last quarter before the government enacts consumer protection programs due to the pandemic.”

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