Foreclosure Filings Rise in Five States as Forbearance Ends

Foreclosure starts rose 14% year-over-year in March in five states as pandemic-era loss mitigation options continued to wind down. Florida, Texas, Louisiana, South Carolina, and New Jersey posted the sharpest increases, with Florida filings up 22% from March 2025, according to ATTOM Data Solutions.

National foreclosure starts totaled 29,244 in March, up 7.8% from a year earlier but still 34% below the March 2019 pre-pandemic benchmark. Rob Barber, CEO of ATTOM, said the concentration of activity in specific states reflects structural factors rather than broad-based distress.

"We are not seeing a crisis-level pattern. What we are seeing is the normalization of a system that was effectively paused for three years," Barber said. Barber pointed to regional insurance-cost increases in Florida and Louisiana, and post-pandemic economic adjustments in Texas Gulf Coast metros, as specific drivers.

Mortgage delinquency overall remains low by historical standards. The Mortgage Bankers Association's quarterly survey showed 3.75% of loans in the fourth quarter of 2025 were at least 30 days past due, compared with the 40-year average of 5.1%. Serious delinquency, defined as 90+ days past due, stood at 1.1%, one-quarter of the 2010 peak.

FHA loans have shown more stress than conventional. The FHA delinquency rate in Q4 2025 was 10.9%, compared with 2.4% on conventional conforming and 4.4% on VA loans. Marina Walsh, vice president of industry analysis at MBA, said FHA's borrower demographic is more exposed to property-insurance shock and job disruptions in service sectors.

HUD extended foreclosure moratorium provisions for FHA borrowers in federally declared disaster areas in January. The most recent extension covers borrowers affected by the 2025 hurricane season in Florida's Big Bend region through September 2026. The Federal Housing Finance Agency maintained similar protections for Fannie Mae and Freddie Mac borrowers in those areas.

Forbearance exits continue to generate some of the current activity. Mr. Cooper and Pennymac both reported in April 10-Q filings that roughly 30% of post-hurricane forbearance enrollees in 2024 have not successfully completed loss mitigation and are now in the early stages of foreclosure proceedings. Both servicers said they are working with borrowers on loan modifications and repayment plans.

The overall outlook remains measured. Fitch Ratings and Moody's Investors Service both projected in March that total U.S. foreclosure starts would rise 10 to 15% in 2026 to roughly 380,000, still well below the 550,000 annual pre-pandemic baseline. Sustained job growth and equity cushions remain the primary stabilizers, Fitch analyst Olu Sonola said.