Foreclosure activity across the United States has turned noticeably higher in 2025, reversing a multi-year lull that followed pandemic-era protections. Data from leading property analysts show both foreclosure starts (when lenders begin the process) and completed foreclosures (bank repossessions or REOs) climbing year-over-year — and certain states and metros are shouldering a disproportionate share of the increase.
Quick snapshot: the numbers you need to know
- Mid-year 2025: ATTOM counted 187,659 properties with foreclosure filings in the first six months of the year — up 5.8% from the same period in 2024.
- July 2025: There were 36,128 foreclosure filings in July alone — a 13% increase from July 2024 and the highest monthly total so far this year. Lenders started foreclosures on more than 24,000 properties that month.
Those topline figures reflect millions of households encountering affordability stress: higher mortgage rates, rising insurance and property costs in hazard-exposed areas, and an uneven labor-market recovery are combining to push some homeowners into default and, eventually, foreclosure.
Where the boom is concentrated
Foreclosure activity is not evenly distributed. ATTOM’s mid-year and monthly reports show recurring hotspots:
- States with the worst foreclosure rates in early-to-mid 2025 include Illinois, Delaware, Nevada, Florida, and South Carolina (among others), while states showing the largest year-over-year increases included Alaska, Rhode Island, Wyoming, Utah and Colorado.
- Highest volumes of foreclosure starts (raw counts) have been in Texas, Florida and California — states with large housing inventories and large metropolitan populations — with Illinois and New York also appearing near the top for starts and completed REOs.
- Metro areas registering the worst foreclosure rates include Lakeland, FL; Columbia, SC; Chicago, IL; and Ocala, FL — places where local economic stress, housing-stock composition and, in some cases, climate/insurance shocks amplify distress.
In short: some Sun Belt markets lead in absolute numbers (big populations = more filings), while certain smaller states and metros lead in rate (foreclosures per housing unit) — a distinction that matters for local policymakers and community groups.
Who’s “leading” foreclosures: lenders, servicers, and structural drivers
It’s tempting to ask which banks or mortgage companies are personally driving the uptick. The picture is complicated:
- Large mortgage servicers historically process the bulk of foreclosure activity because they control collections and default workflows for huge pools of loans. Federal reviews after the 2008 crisis highlighted that a relatively small number of major servicers handle the majority of foreclosures — a structural reality that persists. That means big servicers (and the banks or investors behind the loans they service) are usually the entities filing foreclosure actions when borrowers default.
- Meanwhile, the mortgage landscape is consolidating. Recent M&A in 2025 — for example Rocket Companies’ moves to bulk-up servicing scale — mean a handful of platform players now touch more borrowers, which can concentrate future foreclosure volumes with fewer firms even if the underlying homeowner problem is widespread.
Put simply: the foreclosure “boom” is driven more by macro stresses on homeowners (higher rates, costs, local shocks) than by one rogue lender. But because servicing is concentrated, the largest servicers inevitably figure prominently in foreclosure pipelines.
Why foreclosures are rising now
Several factors are converging to push foreclosures higher:
- Elevated borrowing costs. Homeowners who purchased or refinanced in prior years at ultra-low rates face steep payment differentials when they move or refinance now, reducing mobility and increasing financial strain for those whose incomes fall or expenses rise.
- Rising insurance and property costs. In many regions insurance premiums have jumped (especially where climate risk is high), adding to monthly carrying costs and sometimes triggering lender action when homeowners can’t keep policies current. Research suggests climate-related disasters could contribute meaningfully to future foreclosure risk if trends continue.
- Lagging wage gains and affordability squeeze. When wages don’t keep pace with cost increases, delinquencies rise — and with them, foreclosure starts and eventual REOs. Harvard and other housing researchers have also flagged long-term affordability pressures that make more households fragile to shocks.
Who bears the costs — and what to watch next
- Homeowners and neighborhoods pay first: foreclosures damage credit, destabilize households, and — in concentrated pockets — can depress neighborhood values.
- Municipalities face lost tax revenue and the expense of dealing with vacant or vandalized REO properties.
- Investors and servicers may experience short-term losses but also buying opportunities (institutional investors often acquire REOs or bulk portfolios).
Key near-term signals to monitor: ATTOM’s monthly reports (for trends in starts vs. completed foreclosures), county-level filings (to spot localized distress), and servicer disclosures or regulatory actions (which can show whether certain portfolios are seeing disproportionately high defaults).
Final thought
After years of pandemic-era protections and historically low interest rates, the U.S. housing market is recalibrating. The recent rise in foreclosures is uneven but clear: large states with big populations account for the lion’s share of filings in raw numbers, while smaller states and specific metros suffer higher rates of foreclosure per housing unit. Structural concentration in mortgage servicing means a handful of big firms will continue to process most foreclosures — but the underlying story is largely economic and environmental: affordability stress, insurance shocks, and higher financing costs are the engines of the current increase. Policymakers, servicers and community organizations will need to act in concert to reduce avoidable foreclosures and to stabilize the communities most at risk.
Please note: Any opinions discussed in this article belong solely to the author, Marissa Berends, and do not necessarily reflect the views of Capitol Lien.
About the Author
Marissa Berends is a Certified Abstractor and Industry Relations Coordinator at Capitol Lien, a nationwide due diligence and risk mitigation services provider. Since joining the company in September 2021, she has earned abstractor certifications in Minnesota, Nebraska, and North Dakota. She is pursuing her Wisconsin Title Examiner certification, which is expected to be completed in Fall 2025.
Marissa is involved with the following groups: Wisconsin Land Title Association’s (WLTA) Convention Committee & Young Title Professionals; Nebraska Land Title Association’s (NLTA) Convention Committee; Property Record Industry Association (PRIA) National Education Committee; Illinois Land Title Association’s (ILTA) Inclusion, Diversity, Equity & Acceptance (IDEA) Committee; and the National Association of Land Title Examiners and Abstractors (NALTEA).
About Capitol Lien
Capitol Lien empowers real estate and title professionals with trusted public record research and due diligence services nationwide. With 35 years of experience, Capitol Lien specializes in fast, accurate property and title searches, lien reports, and document retrieval that help title agents, underwriters, and legal teams operate their businesses with confidence. The Capitol Lien team takes the hassle out of title research with local experts and innovative tools that make it easier to mitigate risk, stay on schedule, and keep your closings moving smoothly.
Learn more at capitollien.com. Ready to simplify your title research? Send your next order to Capitol Lien and experience the difference trusted diligence makes. Stay in touch with Capitol Lien on LinkedIn for industry updates and information. Reach out! contact@capitollien.com or 800-845-4077.
Sources:
ATTOM: Foreclosure Activity in First Half of 2025 Up from Previous Year; U.S. Foreclosure Activity Jumps 13% Year Over Year in July, Highest of 2025; U.S. Foreclosure Activity Sees a Slight Monthly Decrease in May 2025
Manistee News Advocate: Harvard report: Soaring prices, high rates lock out US homebuyers
Investopedia: Right of Redemption: Definition and How to Exercise the Right
Axios: Rocket Mortgage – domination vision
FDIC: Regulatory Actions Related to Foreclosure Activities by Large Servicers and Practical Implications for Community Banks