Findings From The Q1 2024 Foreclosure Report

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Good morning, good afternoon and good evening everybody.

Hey.

Welcome to this special edition of the Note closure show. The Q1 2024 foreclosure report just recently came out and we're going to spend today's episode diving into what it disclosed, the numbers. What states are facing more foreclosures? Is it up? Is it down? What's going on? Tom and I thought you guys might find this very interesting as I did. So let's dive into the deep dive. The numbers, the meats and potatoes of what the foreclosure report disclosed. Maybe what it didn't disclose either too. Some of the things that concerns me that it didn't report on. But anyway, let's dive into it. Basically the report, the foreclosure report is released by Adam. If you don't know what ADAM is, it's a data solutions company really reports on most of the major markets across the country. Literally about 99 of the population is covered in the report. Pulling data from over like 3,000 counties across the the United States. And their report that came out just a week ago, roughly less than a week ago, reveals a market in transition. Now is it transitioning for the good or the bad? I'll let you be the judge of that because I think it is totally dependent on what market you're in, where you're located and you know what state. There's a whole lot of different things going on. You can't make a blanket statement that oh, the market's great or the market's horrible or we're not going to see a fail or 2008 all over again. Let me clarify that we're not going to see a 2008 all over again. But the market is stressed. Yes. It's in a bit of a transition. We all know this. With rates continue to stay the same and rates not coming down, people have a hard time paying bills. Things are more expensive. It's definitely an interesting report, and let's dive into it for you. So, anyway, the overwhelming number one thing that the foreclosure report discussed is that there were 95,000 plus foreclosure filings. That's right. Foreclosure filings. All right. And that is actually down just under 1% year over year from 2023 numbers, but it is actually up 3% from Q4. So Q1 is down from last year's numbers just a little bit, about 1%, but it's actually up 3% from Q4. 95,000 filings, foreclosure filings. All right, so that's something to keep in mind. Yes. It means, way I look at it, it's a little bit worse than last year.

Okay.

Definitely. As we start seeing a trending aspect of it going up here into Q2, the biggest thing that came out of this was in Q1, 2024's foreclosure data reveals a market in transition with slight increases in filings and starts alongside a notable decrease in REO properties. Explains Rob Barber, who's the CEO over at Adam.

Okay.

While foreclosures remain relatively stable, we're closely monitoring these trends. Homeowners continue to hold significant equity, contributing to a persistently hot housing market. Now, hot housing market seems a little strange because it's definitely cooled down in the last year. So I'm not sure what Rob was talking about that, yeah, we're still not seeing a lot of foreclosures. But that's also because he's putting a blanket statement across the country. Every state is a little bit different, and we are seeing some increased foreclosures in specific states. And that kind of surprised me. All right, now, the starts in Q1 as we talk about foreclosure starts, not those that went through, but it was basically 6. Just over 65,600 foreclosures. Starts took place in January, February, March of this year.

Okay.

Now that's up 4% year over year.

Okay.

And it's up 2% from Q4. So what does it tell you? Things are getting a little bit worse than last year in the foreclosure starts. That means what? People aren't being able to pay the mortgage and the banks, the Lenders are starting to start the foreclosure process. Definitely it's the biggest things out there. And what it did is it pulled the numbers based on states that had more than a hundred plus starts in Q1 of 2024. Now, New Hampshire saw a 43 increase in foreclosure starts. Illinois saw an increase in 26%. God's waiting room. Florida increased by 22%. All right. Rhode Island 21. And then Nevada. So an increase in 16% in foreclosure filings. Okay, so if you're living in New Hampshire, that's the worst and the biggest increase in foreclosure starts. All right, Think about the New Hampshire, Illinois, Florida, Rhode island and Nevada. Those were the five states that had more than 100.

Okay.

Those were the biggest, I guess you could say culprits of foreclosure. Starting to take place again in Q1 right now. The foreclosure rates. This is one. It's always concerning you to look at things. Basically across the United states, we saw one in every 1478 houses across the USA start to have a foreclosure. One in every basically just under 1500. Under, yeah, it was worse in Delaware. Delaware had basically one in 894 homes at a foreclosure start. New Jersey had one in every 919. South Carolina saw one in every 929. Nevada had one in every 961. And then God's waiting room is nice to joke about. Florida, the Sunshine State had one in every 973. So that tells you if you look at those several judicial, one non judicial, starting to see that foreclosure roll across there. And I always talk about how the foreclosure markets, especially in the United States, it's like a domino effect. You're gonna have some states that tumble earlier have faster foreclosure rates that drag out a little bit depending on what's going on. I think the states that drag out the most, like Florida, New Jersey for a couple examples, even South Carolina is a year to foreclose, is that it gives people a little bit more time to come to the table, maybe make some things to sell a property versus faster state like Texas or Georgia, where it's going to happen pretty quickly.

Okay.

Now the biggest markets, the top five markets. And this is, this is what I don't like about this report a little bit. It states this is among the 224 markets with populations of 200,000. So if you live in a city that has less than 200,000. You're not in the top five based on Adam. Now I would love for them to go back and done 100k plus and I think it would give you some different numbers. But the five markets that are seen the most amount of foreclosure starts.

Okay.

Columbia, South Carolina, it's one in every 569. Spartanburg, South Carolina, one in every 597 homes. Lakeland, Florida, one in every 624. Atlantic City is not really surprised because that's been distressed for a while, but one in every 628. And then Cleveland, Ohio, the Browns. All right, Home of the Rock and Roll hall of Fame, where you're having a hard home of the hard knocks when it comes to foreclosures started. Basically one in every 662 is based in a foreclosure action. Okay, so Columbia, South Carolina. Spartanburg, South Carolina, Lakeland, Florida, Atlantic City and then Cleveland. So you're living in those areas. Hey, you're probably gonna see some more distressed stuff hitting the market. If you're an investor in those areas, you're looking for distressed deals. There you go. Maybe you're looking at the foreclosure listings, the foreclosure filings to find potential borrowers in trouble.

Okay.

Something if you're, you know, these are the things about. Like I said, all of those five cities are in four states. They're all judicial foreclosures. The longest will be. New Jersey has the longest foreclosure process. Florida would probably be. Yeah, Florida would be second. South Carolina would be third in. Ohio would be the fourth longest of those five cities. Okay, moving on. Now if you start looking at completed foreclosures, this is these, these are REOs where the lender or the bank finish the foreclosures.

Okay.

This is that foreclosure to tsunami. We're all hoping for all those real estate investors hoping to see a wave of foreclosures hit the market. There was just over 10,000 completed foreclosures or new real estate owned properties to hit the market. Or basically where the banks finished the foreclosure, took in the auction and it became an reo. Basically, the bank probably took it back or they, or they sold it to the auction. Now that's up 7% from Q4. All right, that's up. It's also, this is the interesting thing, it's down 20 year over year. Okay, so it's down from 20, 23 in this time last year in Q1. All right, that's fine, but it's up from Q4. So what we've seen that trend a little bit scooping up because I don't like to look. I mean it's great to know what we were, you know, a year ago and five years ago. But you look at the numbers four years ago we were in the middle of COVID Everything came to a screeching halt.

Okay.

And that's where you look at. You're starting to see increased numbers in the last 90 days. On 20 days, the states with the most foreclosures that took place. Michigan was number one with 1049 foreclosures that finished up. California was number two with 845. Pennsylvania number three with 838.

Okay.

Illinois had 810 and Texas the Lone Star State, 596. These were REOs total foreclosures that took place in Q1 of 2024. Now 596, yes. We'll have stuff across the country, but I'm being willing to bet that a big chunk of that in Texas was in Harris county, which is all. It's the biggest county in Texas. It's where Houston is and always seems to lead. I mean it's always got the county with the most amount of foreclosure scheduled, stuff like that. So that was just in Q1 had 596 that took place that didn't get delayed, the candy kicked down the road, but took place in Q1.

Okay.

Foreclosure time frames. Okay. So this is something to think about that they evaluate and found that they found out that. That the time to foreclose increased by 2% in Q1. Now that's A. They found it to be a 736 day average. That's blanket across the country. Higher in some states, lesser and obviously a chunk of them as well. They also. The time to foreclose decreased by 20% year over year.

Okay, so that.

Let me rephrase that because this will be a little confusing. Time to foreclose increased by 2% in Q1 which is increased to a 736 day average. Basically increased by about, oh, 14 days.

Okay.

And the time to foreclose actually decreased by 20% when you look at year over year. So it's been the same since 2020, but that's now changed. It's actually gone down a little bit as far as the decreased number. But that's okay. That doesn't really surprise these things is modifications, loan forbearance agreements, all that kind of stuff will Kind of the states that had the longest time frame, this is something you would probably, as a note investor, you would take a lot of notice that it's like, aha, do I want to avoid these states of the long foreclosure time frames. Louisiana, longest time to foreclose. On average, it took 2,641days to foreclose.

Okay.

That's in Q1 alone. Longest average foreclosure days, timeline. In Q1, those that went to foreclosure, the average time frame in Louisiana was 2641. Means they're just kicking the cam. You got to love that whole province way or that kind of the French legal thing. So that might be a reason why you're probably not going to want to buy notes in Louisiana, because it can take forever to foreclose. Hawaii, not really a surprise there, because they've been hit so hard by tourism and stuff like that. They still haven't rebounded. 20, 31 days. Okay, new York, all right, the Big Apple state, not really surprised here. 1958 days to foreclose. Nevada, this kind of surprised me. Nevada, 1701 days to foreclose. And then the Bluegrass State, Kentucky. In Q1, the average foreclosure that took place, it took. It took them 1701 days to foreclose. So that's definitely something to keep in mind. But like I said, that's the longest, average foreclosure days. Timeline that show up in Q1. So those that went to foreclosure, these were the longest time frames in those states. States are the worst.

Okay.

Now you look at the shortest.

Aha.

For real estate investors, this is a valuable thing to look at. Fastest foreclosure time frames, a couple of these, it kind of surprised me. But then they didn't. This was for just Q1. Montana. All right. Montana was the fastest. An average of 123 days to foreclose. Across the board. Virginia came at number two, 152 days. So basically from four months to five months, Texas came in at 163. Now, Texas, you can only foreclose in the first Tuesday of the month, and you've got to have your notice in by 21 days prior to that. So it's either going to be 21 days or like 51 days to kind of get the ball rolling. So average is 163. Wyoming came in at 191, and West Virginia was 217 days. So just over seven months and basically a week for West Virginia. I'd be willing to bet it probably it takes place depending on where they're at and kind of how remote it is in West Virginia. But all of these are non judicial states. Faster foreclosure states for the most part. Okay, now some of some takeaways also from the report from March of 2024 just for itself. Okay. All across the country, all across the country, you look at the numbers, it was one in every 4,286 homes had a filing.

Okay.

One in every 40, just under 4,300 homes out of filing. There is 23,000 homes that started the foreclosure process in March. Now that's up 3% greater than in February and down 4% year over year from this time last year.

Okay.

It's important to know. So it's up since February, down since the year over year. That's fine. But we see kind of that trending is changing ways than it was a year ago.

Okay.

There's also in March, okay. Just last month there was 2700 REO's that were completed by banks and lenders where they finished the foreclosure. That's actually down 20% from February from a month earlier. So things have actually slowed down a little bit. And that's actually down 44% from a year over year. Okay, it's down quite a bit from last year. That was actually a surprise. But you know, if you look at things, the trending side, if you think about last year, it would have been like a year after Covid was released and stuff like that, things taking place in 2022-2023. So you had all this bottleneck of loans that took place that happened, and now it's been a little bit slower to take place now. Okay, the states that had the biggest amount of foreclosures, okay, same with the highest foreclosure rates. Illinois, 1 in every 2548 homes. Connecticut, 1 in every 2609 homes. I was really surprised about Connecticut. Okay, New Jersey, one in every 2638 homes. Florida had one in every 2779. And then South Carolina again, which we see Florida, South Carolina and Indiana, I'm sorry, New Jersey showing up quite a bit. But South Carolina had one in every 2867 homes. Remember, Columbia and Spartanburg were part of that aspect of those two of the biggest cities there in South Carolina. So lots of great stuff there. If you'd like to get the full report to see how your state averaged and what the numbers were, you can go to this link. Snip Lee/Q1 24 foreclosures, that's snip Lee/Q1 24 foreClosures. That's foreclosures with a capital F. We'll put the link in the obviously in the comment section and take a look at it. I'd love to get your feedback, what you thought about it. If you get any surprise on the numbers, anything about this report, surprise you. We're going to start doing this on a quarterly basis as they come out, because I know it's such great information for folks because I always get questions. Where's the market at? Well, the market varies on where you're at and what's going on in that state. The foreclosure, time frame, the amount of violence, all that good stuff is definitely dependent on individual characteristics taking place in your state. So go out there, everybody, have some fun, and hopefully we'll see you at the top. Bye, everybody. Sam.