Distressed mortgage indicators tracked by Attom registered increased activity last month, resuming a slow climb back toward levels seen prior to the pandemic.
The total number of default notices, scheduled auctions or bank repossessions rose 7% from the previous month and 14% from a year earlier to 35,196, largely reversing a decrease between March and April, according to the company, which curates real estate data.
Foreclosure starts jumped to 23,245 in May, up 4% from April and 5% from 12 months prior.
Real-estate owned numbers experienced a particularly large leap, which was the highest seen this year, according to Attom. Mortgage companies repossessed 4,020 properties through completed foreclosures, representing an increase of 38% from April and 41% from a year ago.
While the jump in completions was large, it was somewhat in line with the drop seen the previous month and therefore "could just be REOs making their way through the pipeline in May and leveling," said an Attom spokesperson.
Some real-estate brokers said they have seen a consistent increase in REO volume compared to the first quarter.
"My to-date Q2 2023 foreclosure auction volume is up about 40% over Q1. I'm continuing to see strong participation from local to the property and smaller investors," said Rich Kruse, managing partner at auction house and real-estate brokerage Gryphon USA.
Foreclosure activity overall still remains below levels seen before COVID-19 restrictions impacted it, in part because of the slow removal of pandemic relief and the addition of new forms of loss mitigation like the Federal Housing Administration's payment supplement partial claim.
"Policymakers are doing everything they can to keep you in your home, which may be a good thing, but by reducing foreclosure sales, they do take housing supply out of the market that might have otherwise come on," said Peter Idziak, senior associate, Polunsky Beitel Green.
