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There is a foreclosure crisis that is starting to surge across the nation. As soon as the government mortgage forbearance programs designed to help homeowners deal with the economic fallout of the Covid-19 pandemic expired, the grave reality of the current housing market has started to show.

Mortgage lenders have ramped up foreclosure filings with an increase in the third quarter of 68% nationwide compared to a year ago, according to a new report from the real estate analytical firm ATTOM.

Approximately 25,209 U.S. properties were at some stage in the foreclosure process in the third quarter of 2021, a 32% increase from the second quarter.

The report also showed there were a total of 19,609 properties with foreclosure filings in September 2021, up 24% from August and an increase of 102% from September 2020.

“Foreclosure starts are very likely to rise over the next six months to a year, with the increase ranging from a tick to a torrent,” says Todd Teta, chief product officer at ATTOM Solutions.

According to recent reports by Black Knight, forbearance volumes continue to decline, falling below 1.6 million in September. However, serious delinquent borrowers with more than 90 days behind are still roughly triple their pre-pandemic levels.

Approximately 1 million homeowners are currently in some stage of the forbearance program with their lender, and these people will most likely add to the foreclosure crisis once their agreement ends.

Lawrence Yun, the chief economist at the National Association of Realtors, had said, “The last time we saw this high of a level was back in 2008 and 2009 during the financial crisis. But what is different this time is that the foreclosure rate is at a historic low because of the forbearance program.”

In March, the U.S. government enacted The Emergency Mortgage Assistance Program, or EMAP, a $10 billion American Rescue Plan was set aside for housing assistance.

The U.S. Treasury has been approving state housing programs funded with Homeowner Assistance Fund relief. Arizona and Nevada have started mortgage assistance programs to deal with the crisis, and many more states are expected to announce their plans soon.

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