Late last week ATTOM Data Solutions released their November 2020 U.S. Foreclosure Market Report which continued to show an 80% decline in activity from last year due to the pandemic motivated foreclosure moratorium in place. That FHFA moratorium continues to get extended and is currently in place until January 31, 2021.

It’s worth noting that, despite the moratorium, foreclosure activity continues at some low level and Chicago and Illinois manage to be at the forefront. The foreclosure report gives honorable mention to Illinois for having the second highest foreclosure rate in the nation and the second highest number of bank repossessions. Chicago was recognized as the metropolitan area with the highest number of bank repossessions and the third highest number of foreclosure starts.

ATTOM also updated their RealtyTrac data which allowed me to update my Chicago foreclosure activity graph below, which doesn’t really tell you much since it’s at such a low level.

Chicago foreclosure activity has declined dramatically since the housing crisis. However, the recent plunge is the result of the moratorium placed on foreclosures in light of the Covid-19 crisis.

However, when you look at the delinquencies out there you know that at some point foreclosures are going to come roaring back once the moratorium ends for real. The graph below is from Black Knight’s October mortgage data and it shows a slow decline in delinquencies after a huge spike earlier this year when the pandemic hit.

Mortgage delinquencies are very slowly trending downward after hitting an ugly peak a couple of months ago

Of course it’s good that mortgage delinquencies are drifting down but there are some segments of the mortgage market that are not doing even this well. The Mortgage Banker’s Association reports that the FHA delinquency rate was 15.59% for the 3rd quarter of 2020, hardly any lower than it was in the 2nd quarter. Keep in mind that this tends to be lower income borrowers that have been hit pretty hard by this pandemic.

Chicago Shadow Inventory

I’ve finally been able to update my Chicago shadow inventory (homes in the foreclosure process that are probably not on the market) graph below. It continues to show a steady decline to new record lows, helped by the fact that the spigot of new foreclosures has essentially been turned off. It’s dropped by another 331 units over the last 2 months.

The number of homes in foreclosure in Chicago continues to decline during the pandemic

#Foreclosures #ChicagoForeclosures

Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.