Maine, US home foreclosure rates at all-time low, but could soon change
Maine is now on-trend with the rest of the nation for home foreclosure rates after having one of the country’s highest rates last year.
Both Maine and the U.S. saw decreases in rates in the first six months of 2021. The number of U.S. properties with foreclosure listing — 65,000 default notices, scheduled auctions or bank repossessions — was down 61% from the same period last year, according to a new report from ATTOM Data Solutions. That figure is down 78% from the same time period two years ago.
Maine is consistent with the nationwide average of 0.05% of all housing units with a foreclosure filing in the first half of 2021, ranking the state 14th, with 396 total properties with filings. That’s down from third during the company's third quarter report last October.
While ATTOM, a real estate data firm based in California, didn’t offer an explanation of why state rankings change, Mark Violette, broker/owner of Maine Mortgage Solutions LLC, speculated that it could be due to Maine’s increased real estate demand.
Dani Ohalloran, associate broker with Realty of Maine, suggested it could be related to rate increases in other states or that the unemployment benefits many Mainers have recently received helped more people stay in their homes.
States with the highest foreclosures rates are Delaware (0.10%), Illinois (0.09%), Florida (0.08%), Ohio (0.08%), and Indiana (0.08%). Vermont, West Virginia, South Dakota, Montana, Colorado and Kansas have the lowest, all at 0.01%.
While foreclosures are at an all-time low, the trend could soon change. The federal government’s foreclosure moratorium is scheduled to end at the end of this month.
U.S. properties that have started the foreclosure process (6,826 in June) are up 16% from the previous month and up 40% from a year ago. Lenders completed the foreclosure process on 2,311 properties in June, up 76% percent from the previous month but down 8% from a year ago.
"The government's foreclosure moratorium and mortgage forbearance program have created an unprecedented situation — historically high numbers of seriously delinquent loans and historically low levels of foreclosure activity," said Rick Sharga, executive vice president of ATTOM company RealtyTrac, in a news release.
"With the moratorium scheduled to end on July 31, and half of the remaining borrowers in forbearance scheduled to exit that program over the next six months, we should start to get a more accurate read on the level of financial distress the pandemic has caused for homeowners across the country."
Ohalloran said she is starting to see more foreclosures. She hadn’t noticed any listings since the pandemic, but has seen two or three this week.
“I think it will grow as time goes on,” said Ohalloran, who has worked in real estate for 24 years. “I don’t think [the moratorium lifting] will have a big impact until a year out, but it’s hard to say. Historically, it’s not until two or three years out that we’re seeing an impact.”
While the federal moratorium only applies to federally backed loans, Bank of America lifted its foreclosure suspensions June 30. Wells Fargo plans to extend foreclosure protections for occupied homes until 2022, according to a CNBC report.
The end of the moratorium may not mean an increase in bank repossessions, which dropped to their lowest six-month total since tracking first began in 2005. Lenders foreclosed on a total of 9,730 U.S. properties in the first six months of 2021, down 74% from a year ago.
"Fewer bank repossessions may be a trend we continue to see even after the government's programs protecting borrowers from foreclosure expire," Sharga noted. "Rising home prices have provided most homeowners with enough equity to sell their homes at a profit, rather than lose them to a foreclosure or repossession."
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