{"id":3833,"date":"2021-12-19T11:40:27","date_gmt":"2021-12-19T15:40:27","guid":{"rendered":"https:\/\/propertyonion.com\/education\/?p=3833"},"modified":"2024-09-08T09:08:56","modified_gmt":"2024-09-08T13:08:56","slug":"foreclosure-predictions-for-2022","status":"publish","type":"post","link":"https:\/\/propertyonion.com\/education\/foreclosure-predictions-for-2022\/","title":{"rendered":"Foreclosure Predictions for 2022: Could the Real Estate Market Be in for a Dose of Reality?"},"content":{"rendered":"\n<p>Let\u2019s get that crystal ball out for one last dust down in 2021 and talk about foreclosure predictions for 2022. The 2021 real estate market has been skyrocketing due to a pandemic-fueled buying frenzy, which has severely depleted inventory. <\/p>\n\n\n\n<p>However, a possible post-pandemic return to more normal levels is predicted as mortgage rates rise, price gains slow, government intervention reduces, and more supply and less demand come into play. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">In this Article:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/propertyonion.com\/education\/foreclosure-predictions-for-2022\/#Foreclosures_Will_Likely_Increase\" >Foreclosures Will Likely Increase<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/propertyonion.com\/education\/foreclosure-predictions-for-2022\/#Foreclosures_Will_Provide_a_Much-Needed_Boost_to_the_Housing_Market\" >Foreclosures Will Provide a Much-Needed Boost to the Housing Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/propertyonion.com\/education\/foreclosure-predictions-for-2022\/#Be_Ready_to_Act_on_2022_Foreclosures\" >Be Ready to Act on 2022 Foreclosures<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foreclosures_Will_Likely_Increase\"><\/span>Foreclosures Will Likely Increase<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A recent report from ATTOM Data Solutions states that the current market won\u2019t have to wait long to see an upswing in foreclosure activity since the <a href=\"https:\/\/propertyonion.com\/education\/the-aftermath-of-the-eviction-foreclosure-moratorium\/\" target=\"_blank\">moratorium on foreclosures<\/a> was lifted in July 2021. Default notices, bank repossessions, and scheduled auctions spiked by 34% in the third quarter of 2021 and were 67% higher than the third quarter of 2020. <strong>Industry gurus seem to be confident that this uptick will continue well into 2022 after nearly 18 months of a foreclosure moratorium. <\/strong><\/p>\n\n\n\n<p>Todd Teta, chief product officer at ATTOM Solutions, says, \u201cForeclosure starts are very likely to rise over the next six months to a year, with the increase ranging from a tick to a torrent.\u201d<\/p>\n\n\n\n<p>While the nation is experiencing a huge jump in foreclosure\nactivity, foreclosures are still 70% lower compared to pre-pandemic levels. While\nit is a possibility that there will be plenty of foreclosures in 2022, the\nforeclosure prediction is that the amount will be much lower than that of the\nnormal housing market, which means that investors may find a sweet deal on a\nforeclosure property.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cDespite the increased level of foreclosure activity in September, we\u2019re still far below historically normal numbers,\u201d said Rick Sharga, executive vice president at RealtyTrac, an ATTOM company.<\/p><\/blockquote>\n\n\n\n<p>There is still the prediction that foreclosure numbers for\n2022 could stay relatively low because of aggressive modifications by lenders\ncoupled with the fact the homeowners have higher levels of equity in their\nhomes. Federal government and private sector relief programs allowed borrowers\nwith financial difficulties to delay their monthly mortgage payments for up to\n18 months. The missed payments could be tacked on to the end of loan period or\nrepaid when the mortgage was refinanced or sold. <\/p>\n\n\n\n<p>Many borrowers are now exiting forbearance programs. Borrowers in bailout programs dropped 11% week to week in September 2021, <a href=\"https:\/\/www.blackknightinc.com\/blog-posts\/mortgage-loans-in-forbearance-drop-below-2-entering-november\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">according to Black Knight<\/a>, a mortgage data and analytics firm.<\/p>\n\n\n\n<p><strong>Another factor affecting foreclosure predictions for 2022 is whether financial institutions will work with borrowers in distress now that the moratorium has ended. <\/strong>A recent statement from Wells Fargo says, \u201cWells Fargo is here to help homeowners when their payment suspensions are coming to an end, and we are reaching out to engage with our customers through email, letters and by phone.\u201d <\/p>\n\n\n\n<p>\u201cIn most cases, customers who were current on their monthly mortgage or home equity payments when the payment suspension started, and are ready to resume those payments, may be able to move missed payments to the end of the existing term loan. Customers will need to call us to discuss potentially moving the payment to the end of the term or to review the other program options for making up the missed payments,\u201d they continued.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foreclosures_Will_Provide_a_Much-Needed_Boost_to_the_Housing_Market\"><\/span>Foreclosures Will Provide a Much-Needed Boost to the Housing Market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>While foreclosure increases are dramatic, they are coming off\nthe extreme lows that were created by the forbearance programs. \u201cStarts,\u201d which\nare new foreclosures, usually number around 40,000 per month nationwide, but\nthey fell to as low as 3,000 to 4,000 in the first year of the pandemic when\nforbearance programs were in full swing. <\/p>\n\n\n\n<p>There could be an increase in <a href=\"https:\/\/propertyonion.com\/education\/how-to-make-money-with-zombie-foreclosures\/\" target=\"_blank\">zombie properties<\/a>, which are pre-foreclosure homes left vacant by homeowners who defaulted on their mortgage and mistakenly believe they must immediately move out following a foreclosure notice. These types of properties usually show up in poorer areas where homeowners are more likely to be in financial distress, are less educated in the <a href=\"https:\/\/propertyonion.com\/education\/you-won-the-foreclosure-auction-this-is-what-happens-next\/\" target=\"_blank\">foreclosure process<\/a>, and have less money to work out a deal with their lender. <\/p>\n\n\n\n<p>Zombie homes account for one in 13,000 around the US, according\nto ATTOM Solutions. Lenders will most likely take on the homes that are abandoned\nfirst rather than foreclose on homes where they can work out potential deals\nwith borrowers. <\/p>\n\n\n\n<p>Brokers agree that an increase in foreclosure properties coming onto the market in 2022 could provide a needed boost of housing stock, which is still in desperate need of inventory. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Rei Mesa, CEO of Berkshire Hathaway in Florida, states, \u201cI don\u2019t see that as an issue, and in fact, I\u2019d see this as an opportunity for buyers to be able to purchase properties because there is a lot of competition and very few listings.\u201d With the current demand for housing, Mesa thinks that any new listings will be absorbed quickly.<\/p><\/blockquote>\n\n\n\n<p><strong>Q3 2021 data reported by ATTOM Solutions says that Florida was among the states with the highest rates of foreclosures<\/strong>, with more than one out of every 2,000 properties in the foreclosure process. The states with the largest numbers of new foreclosures were:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>California:\n3,434<\/li><li>Texas:\n2,827<\/li><li>Florida:\n2,546<\/li><li>New\nYork: 1,363<\/li><li>Illinois:\n1,362<\/li><\/ol>\n\n\n\n<p>Part of the preparation for brokers and <a href=\"https:\/\/propertyonion.com\/education\/how-to-find-an-investor-friendly-real-estate-agent-and-why-you-need-one\/\" target=\"_blank\">real\nestate agents<\/a> includes honing their skills on foreclosure properties and\nbrushing up on training and certifications that stand out for lenders and\nbanks. <\/p>\n\n\n\n<p>\u201cOnce the banks take over the properties, they are going to use those realtors that the lenders are accustomed to working with or have already vetted to handle the listings,\u201d Mesa says. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Be_Ready_to_Act_on_2022_Foreclosures\"><\/span>Be Ready to Act on 2022 Foreclosures<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>What does an increase of foreclosure properties mean for the\ninvestor in 2022? It could mean some great potential deals for flipping or holding\ninvestments for passive income. &nbsp;Some <a href=\"https:\/\/propertyonion.com\/education\/prepare-yourself-to-begin-real-estate-investing\/\" target=\"_blank\">first-time\ninvestors<\/a> may be concerned that their foreclosure investment will never pan\nout, but if you end up with a great house for the price of a cheap one, you may\nonly need a small redo to recoup your initial investment and make a tidy sum. <\/p>\n\n\n\n<p>Compared to other homes in the neighborhood, you could win a\nforeclosed home at auction and pay 20-50% less. Once you fix it up and sell it,\nthat could equal a huge pay day! But always make sure you do your due diligence\nbefore purchasing a foreclosed home, including <a href=\"https:\/\/propertyonion.com\/titlecheck\/about_title_check\" target=\"_blank\">title searches,<\/a>\nand find a great real estate attorney for your team. <\/p>\n\n\n\n<p>You can come to your own conclusions about 2022 foreclosure predictions,\nbut the market for investors looking for a good foreclosure deal still seems\nstrong. With no federal protections for cash-strapped homeowners, the prediction\nis that the foreclosure rate will climb higher in 2022. It may lead to great\nopportunities for potential investors who are looking to capitalize on the\npurchase of foreclosure properties and buyers who have been priced out of the\nmarket over the last 24 months.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Let\u2019s get that crystal ball out for one last dust down in 2021 and talk about foreclosure predictions for 2022. The 2021 real estate market has been skyrocketing due to a pandemic-fueled buying frenzy, which&hellip;<\/p>\n","protected":false},"author":2,"featured_media":3869,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[348,11,94,376,337,259,67,317],"class_list":["post-3833","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-articles","tag-348","tag-foreclosure","tag-foreclosure-auctions","tag-housing-market","tag-moratorium","tag-predictions","tag-real-estate","tag-zombie-foreclosures"],"_links":{"self":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/comments?post=3833"}],"version-history":[{"count":7,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3833\/revisions"}],"predecessor-version":[{"id":3843,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3833\/revisions\/3843"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media\/3869"}],"wp:attachment":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media?parent=3833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/categories?post=3833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/tags?post=3833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}