Foreclosure: Opportunity in 2023

Mar 6, 2023

By Christian Thompson

Whether you are a title agency professional, attorney, or real estate investor, foreclosure properties increasingly represent a significant revenue opportunity. It’s no secret that foreclosure revenue, considering dwindling refinance options, has become more attractive, if not strategic. Here are some things to consider if you are considering investing time, energy, and resources into foreclosure properties.

ATTOM, a leading curator of real estate data, released its January 2023 Foreclosure Market Report with some interesting findings.  ATTOM reports that there are 31,557 U.S. properties with foreclosure filings. These properties lay somewhere within the foreclosure process, be it just the beginning with default notices, scheduled for auction, or bank-repossessed and owned.  The number of affected houses is less the takeaway here as the real estate market continues to feel the squeeze of limited inventory.  The more interesting fact is a 36 percent increase in foreclosure filings from a year ago.  Such an increase is hard to ignore.

Moreover, two trends begin to appear if one takes a deeper look at the numbers. Movements that can shape your strategic perspective.  Here they are:

  1. Completed foreclosures see a first year-over-year decline.

We all know that starting something is much different from finishing something.   Foreclosures prove to be a time-consuming process that could extend out for months, especially when it comes to judicial foreclosure.   Judicial foreclosures involve legal actions such as challenging the foreclosure in court, applying for loss mitigation, or simply requesting more time from the court, which can add time to the transaction.  Depending on the property’s value and all legal services involved, this could eat at one’s profit margin. ATTOM reports that lenders repossessed 3,896 U.S. properties as a result of completed foreclosures in January 2023.  While there was a 6 % increase in incoming new foreclosures from December to January, there was a 19 % decrease in completed foreclosures for the same period.  This is true even in ATR’s backyard, as NJ realized a 15% decrease in completed foreclosures from last year.  The exception was PA, showing an increase in completed foreclosures by 12 %.  These numbers might imply that the time to complete a foreclosure can vary by region. And one of the variable factors is the court systems in those regions.

  1. Properties that are beginning the foreclosure process are increasing.

As of January 2023, there are 20,752 U.S. properties in foreclosure.  This represented a minimal 1% decline in properties starting the foreclosure from the month of December.  However, ATTOM’s data show a 75% increase in properties entering the foreclosure process from a year ago.  This is especially true in major metropolitan areas. Philadelphia was listed as one of the significant contributors to this increase. A 75% increase is a solid leading indicator for title professionals for what’s to come in work.

Suppose you find yourself in either of these two situations: Being bogged down in the foreclosure process, waiting for it to wind down to completion.  Or, number two, you find yourself eager to start working with lenders or attorneys who facilitate foreclosure real estate transactions; your due diligence can be the factor that gives you the competitive advantage.  No matter where you are in the foreclosure process, whether pre-foreclosure, bank-owned, or auction having a clear, accurate view of property details is essential to navigating this type of real estate transaction confidently.

Securing a title search through ATR early in foreclosure can be your biggest ally.  If information is power, a title search completed by ATR puts the power in the hands of the title professional.  When the title agent can accurately view and examine a file, they can provide a clear road map to close for their client.  The benefit of using ATR when you’re in the middle of the foreclosure process is equipping you, the title agent or attorney, with a deep dive into a property’s history and understanding what might be done to speed things along or better anticipate and respond to obstacles. If starting out, advising your client about opportunities and threats, including potential time delays associated with a specific property and strategies for avoiding them, is highly valued. Just bringing information to help frame a realistic time frame for the foreclosure completion and the property’s disposition can help your clients make better decisions.

With each foreclosure search, ATR offers its clients a full property report.  ATR’s foreclosure research clearly defines the status of the property in question, where it is in the foreclosure process, all outstanding liens and judgments, as well as up-to-date assessment data of the property.  This information gives a clear lens into the property, which allows our clients to assess the attractiveness of an investment confidently, and tells where you are in the process, which can help build out more apparent closing timelines.

And suppose you are working against tight deadlines or need to get your foreclosure project back on track by expediting the receipt of critical information. In that case, ATR is here to help with our SmartSearchTM, and workflow management systems, where we bundle services into one digitally delivered product that fits seamlessly into your workflow and title production software.

When it comes to foreclosure research ATR provides our partners an accurate property search, comprehensive foreclosure reporting, at a fixed rate.

Click below to schedule a meeting with me to discuss further how ATR can meet you where you are and partner with you for success.

Christian Thompson 
VP Business Development

As Action Title expands to include the Northeastern Corridor, we can now capitalize on our 20 years of experience and infrastructure in the real estate industry. I am looking forward to bringing my passion for market analytics, and larger real estate trends to help you meet your goals. As the industry continues to move away from an analogue approach to a fully integrated digital product, I have never been more optimistic about the future of our industry. With Action’s investment in title search and delivery technology, we are more prepared than ever before to help you grow and succeed to meet whatever demands you may face.

Reach out to learn how our technology and services will enable you to significantly flex your title production capacity while continuing to deliver an exceptional, on-time experience to your clients.