Foreclosures Hit Highest Level Since 2020

Foreclosure filings and starts in the U.S. have climbed to their highest levels since the pandemic-era lows of 2020, driven by the gradual unwinding of relief programs, persistent inflation, and higher borrowing costs. While activity remains well below the 2008–2010 crisis peak, the steady, multi‑year rise now marks a material shift in housing‑market and consumer‑credit risk that credit and collection stakeholders cannot ignore.

Data shows a clear inflection

ATTOM’s Q1 2026 U.S. Foreclosure Market Report recorded 118,727 properties with a foreclosure filing (default notices, scheduled auctions, or bank repossessions), up 6% from Q4 2025 and 26% year over year. March 2026 alone saw 45,921 properties with foreclosure filings, an 18% monthly increase and 28% jump from March 2025, underscoring the acceleration heading into spring.

Monthly data through mid‑2026 confirms this is not a one‑off spike but part of a sustained climb from the historically low levels seen under pandemic protections. In May 2026, there were 40,355 properties with foreclosure filings, down 5% from April but still 14% higher than May 2025.

Highest levels since 2020, but context matters

Foreclosure activity was artificially suppressed in 2020–2021 by broad moratoria and forbearance programs, which kept filings at levels not seen in modern data history. As those protections phased out from 2022 onward, filings rose steadily through 2023 and 2024 and now into 2025–2026, putting current volumes at their highest point since the pandemic began.

Even so, foreclosure filings currently touch a small fraction of U.S. housing units compared with the last crisis era. One analysis of ATTOM data notes filings now represent roughly 0.26% of housing units, compared with a 2.23% share at the 2010 peak, a reminder that today’s stress is meaningful but not yet systemic on the same scale.

Regional hot spots and trends

The recent run‑up is not evenly distributed geographically. ATTOM’s early‑2026 reporting shows elevated foreclosure rates in states such as Delaware, Nevada, and Florida, which posted some of the highest per‑housing‑unit foreclosure rates in January 2026.

By mid‑2026, Indiana, South Carolina, and Florida stand out for particularly high foreclosure rates, with Indiana seeing about one in every 739 housing units receive a filing. At the same time, large states like Florida, California, and Texas contribute significant absolute volumes of filings simply due to their size, magnifying regional impact on servicers, investors, and local courts.

Foreclosure starts and REOs are rising

The recent data show pressure building at multiple stages of the foreclosure pipeline. ATTOM reports that foreclosure starts rose about 20% year over year in Q1 2026, and completed foreclosures (REOs) increased 45% over the same period, indicating that more distressed loans are progressing all the way to repossession.

As of May 2026, lenders initiated the process on 27,304 properties, up 13% from a year earlier, and repossessed 4,092 properties through completed foreclosures, a 6% annual increase. April 2026 data show a similar pattern, with foreclosure starts up 12% and REOs jumping 42% compared with April 2025.

Drivers: macro stress and policy normalization

Multiple forces are converging to push foreclosure metrics higher. First, borrowers exiting pandemic‑era forbearance and relief programs have faced higher mortgage rates, elevated insurance and tax costs, and overall inflation, which erode household cash flow and increase default risk.

Second, the broader economic environment has become more challenging, with slower income growth for some households and lingering effects of prior rate hikes, contributing to rising delinquencies and eventual foreclosure actions. Industry analysts note that the uptick also reflects a “normalization” from ultra‑low foreclosure levels rather than an immediate replay of the Great Recession, albeit with pockets of pronounced stress in certain states and metros.finance.

Implications for servicers and collections

For mortgage servicers and their collection partners, this inflection requires renewed focus on early‑stage loss mitigation. With starts and REOs both rising, portfolios are likely to see more loans moving into serious delinquency and legal status, increasing operational demands on default servicing, borrower outreach, and legal coordination.

At the same time, regulators and consumer advocates remain attuned to foreclosure practices following the pandemic, meaning servicers must balance the push to reduce non‑performing assets with heightened scrutiny of communication, timing, and fair‑treatment obligations. For non‑mortgage collectors, rising foreclosure activity can signal broader household financial strain that may spill over into other credit lines, from auto to unsecured, affecting recovery strategies and expectations.finance.

Regulatory and consumer‑protection angle

Although the recent ATTOM reports focus on market statistics rather than enforcement, rising foreclosures have historically drawn attention from federal and state regulators. Consumer advocates already emphasize that even modest increases in filings can disproportionately impact lower‑income and minority homeowners, particularly in states with weaker borrower protections.

In this environment, regulators are likely to revisit guidance on loss‑mitigation timelines, communication practices, and the use of third‑party collection and legal vendors in the foreclosure process. As the data trend higher, stakeholders should expect continued monitoring of how servicers handle loan modifications, forbearance exits, and foreclosure alternatives such as deeds‑in‑lieu and short sales.

What to watch for in the second half of 2026

Heading into the back half of 2026, industry participants should monitor whether foreclosure activity continues to climb or plateaus at a new “post‑pandemic normal.” Key indicators include the trajectory of foreclosure starts versus completions, geographic diffusion of hot spots, and any signs that distress is spreading beyond currently elevated markets.

In parallel, mortgage performance data, unemployment trends, and policy responses—such as targeted state‑level homeowner assistance—will shape how far this cycle progresses. For credit and collection professionals, the current numbers mark the highest foreclosure activity since 2020, and they suggest a new phase of the credit cycle in which careful risk management, compliant communication, and timely intervention will be critical.