Philadelphia, PA - One in every 2,079 housing units in Philadelphia is under foreclosure, one of the highest in the country, according to the April 2023 US Foreclosure Market Report released by land and property curator ATTOM. On the bright side, despite an increase in foreclosure activity, the figures remain below pre-pandemic levels. In general, home foreclosures are rising nationwide due to the climbing cost of living, lower incomes, unemployment/underemployment, and interest changes. Nonetheless, these figures are expected to stabilize, according to the chief executive officer of ATTOM, Rob Barber. April stats show a 10% decrease in overall activity compared to the 20% increase in March 2023.
Foreclosure Process
Under Pennsylvania law, lenders can only start a foreclosure if the borrower has missed their payments for 120 days. This 4-month period offers most property owners adequate time to submit a loss mitigation application to the creditor. However, before the start of the foreclosure process, the lender must give borrowers a 30-day notice of intent to foreclose. If facing the possibility of repossession, debtors are advised to consult or hire foreclosure attorneys that provide legal advice and defense, negotiate loan modification or negotiation, and offer loss mitigation options. The lawyers can also offer alternatives to foreclosure so that interests are represented effectively. If considering filing for bankruptcy, a foreclosure attorney can guide clients through the bankruptcy process. Furthermore, they can assist in redemption and tenant rights, if applicable. If the borrower fails to address delinquent payments within the 30-day period, the lender can file the foreclosure complaint in the Court of Common Pleas in Philadelphia which signals the formal foreclosure process. The borrower must then be served with a copy of the foreclosure complaint and summons providing them with notice of the legal action against them.
Situation in Philly
Overall, bank repossession has increased since 2021 but were also below levels in 2019. A total of 42,854 properties were foreclosed which represented a 67% increase year-over-year, but 70% below 2019 figures and 96% below 2010 levels. Of this figure, Pennsylvania had one of the highest numbers of repossessions at 2,741, with Philadelphia claiming 1,302 or almost 50% of those repossessions. Illinois and Michigan took the first and second spots.
Foreclosure starts are also high, rising to 169% or 248,170 properties in 2021. However, this number is still below the figures registered in 2019. Unfortunately, Philadelphia had one of the highest rates of foreclosure starts for larger metropolises at 7,286. Says the vice president of ATTOM’s market intelligence, “Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic.”So yes, both government and mortgage industry efforts during the pandemic have been instrumental in preventing millions of unnecessary foreclosures. Another positive development is that although lenders initiated the foreclosure process on 22,455 US properties in April this year, this figure is 7% lower compared to the previous month.
Figures in June are slightly better, with the Keystone State claiming the 16th highest foreclosure rate in the US. However, Philadelphia is the 2nd county with the most foreclosures per housing unit.
