After years of historically low foreclosure activity following pandemic-era protections, the trend has reversed. Foreclosure filings, starts, and bank repossessions have been climbing steadily, with year-over-year increases now stretching past 12 consecutive months. For title and real estate professionals, rising foreclosures change the composition of the deal pipeline and increase the complexity of every transaction they touch.
The Numbers
According to ATTOM’s Q1 2026 U.S. Foreclosure Market Report, 118,727 properties had a foreclosure filing during the first quarter of 2026, up 6% from the prior quarter and 26% year over year.
Foreclosure starts (when lenders initiate the process) rose to 82,631 properties in Q1, a 20% annual increase. Bank repossessions (REOs) climbed even faster, with lenders taking back 14,020 properties in Q1, a 45% year-over-year increase.
In April 2026, 42,430 properties had filings. Starts came in at 28,414, up 12% from a year earlier, and REOs totaled 5,098. While month-over-month numbers fluctuate, the annual trend line has been consistently upward.
ATTOM’s most recent vacant property report shows 245,376 properties were in the foreclosure process nationally as of Q2 2026.
Despite the increases, foreclosure activity remains well below the peaks seen during the 2008-2012 housing crisis. ATTOM CEO Rob Barber has characterized the current environment as a “gradual normalization” rather than a crisis-level event.
Where Foreclosures Are Concentrated
Foreclosure activity is not evenly distributed, and understanding the geographic pattern matters for title professionals managing workloads across jurisdictions.
Highest foreclosure rates (Q1 2026): Indiana led the nation at one in every 739 housing units with a foreclosure filing, followed by South Carolina (one in 743) and Florida (one in 750). Illinois and New Jersey rounded out the top five.
Highest filing volumes: Texas, Florida, and California continue to lead in raw numbers, driven by their large housing inventories and metropolitan populations. Illinois and New York also rank near the top for both starts and completed REOs.
Notable metro areas: Chicago, Philadelphia, Houston, Dallas, and New York consistently appear among the metros with the highest REO volumes. In Florida, markets like Lakeland, Ocala, and Cape Coral-Fort Myers are experiencing elevated distress.
The pattern is consistent: large-population Sun Belt states generate the highest raw filing counts, while certain smaller states and specific metros have the highest rates per housing unit.
What’s Driving the Increase
Several factors are converging to push foreclosure activity higher:
Elevated borrowing costs. Homeowners who purchased at ultra-low pandemic-era rates face steep payment differentials if their financial circumstances change. Those who took on adjustable-rate products or borrowed at the upper edge of their affordability are most vulnerable.
Rising insurance and property costs. In climate-exposed markets (particularly Florida and parts of the Gulf Coast and Southwest), insurance premiums have surged. When homeowners can’t maintain coverage, lenders may initiate foreclosure. As one analyst quoted in the HousingWire coverage of ATTOM’s Q1 data noted, the surge in insurance costs has pushed many Sun Belt homeowners into situations where they can’t sell at a price that satisfies their liens.
Pandemic-era gains reversing. Markets that experienced the largest price run-ups during 2020-2022 (particularly in Florida, parts of Texas, and the Mountain West) are now seeing corrections. Borrowers in these markets may find themselves underwater or unable to sell for enough to cover their mortgage, making foreclosure more likely.
Gradual expiration of loss mitigation. The extensive forbearance and loss mitigation programs put in place during the pandemic have largely run their course. Borrowers who exhausted modification options but could not sustain payments are now entering the foreclosure pipeline.
Why This Matters for Title Professionals
Rising foreclosure activity directly affects the work title companies and abstractors do every day.
More complex title searches. Foreclosure properties carry layered encumbrances: the foreclosing lien, subordinate liens, tax liens, HOA liens, judgment liens, and potentially competing claims. Each requires identification, verification, and priority analysis during the title search.
Lis pendens and default notices. As foreclosure starts increase, more lis pendens and notices of default appear in the public record. Title examiners need to catch these filings to ensure they don’t issue commitments on properties with active foreclosure proceedings.
REO transactions. When lenders repossess properties, the subsequent sale generates title work that often involves entity verification (the bank or servicer as seller), confirmation of the foreclosure’s validity, and review of any outstanding liens that survived the foreclosure process.
Zombie foreclosures. Properties that enter the foreclosure process but stall (where the borrower has left but the lender hasn’t completed the repossession) create title ambiguity. ATTOM’s data shows 245,376 properties in the foreclosure process nationally, and a subset of those are zombie properties with unclear ownership and maintenance status.
Faster timelines under higher volume. As one industry observer noted in ATTOM’s Q1 coverage, when foreclosure volume rises and resolution timelines tighten simultaneously, small gaps in the research process become expensive quickly.
Court research demand. In judicial foreclosure states, the foreclosure process runs through the courts. Rising foreclosure starts mean more filings to track, more dockets to monitor, and more court records to review.
Capitol Lien’s court research, lien research, and real estate research services help title professionals stay ahead of rising foreclosure volume. Whether the work involves identifying subordinate liens on a distressed property, verifying the status of a lis pendens, or confirming clean title on an REO sale, accurate and timely research is what keeps these transactions moving.
Key Takeaways
Foreclosure activity in 2026 is rising steadily, with Q1 filings up 26% year over year and bank repossessions up 45%. While volumes remain below crisis-era peaks, the sustained upward trend is creating more complex transactions for title professionals across the country.
The increase is driven by a combination of elevated borrowing costs, rising insurance premiums in climate-exposed markets, pandemic-era price corrections, and the gradual exhaustion of loss mitigation options. The geographic concentration in Florida, Indiana, South Carolina, Texas, and Illinois means title professionals in those states are feeling the impact most directly.
For title companies, the takeaway is practical: more foreclosure activity means more liens to identify, more filings to track, more court records to review, and more complex title searches to complete accurately and on time.
This article is provided for informational purposes only and does not constitute legal, financial, or investment advice. Consult a qualified professional for guidance specific to your situation.
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.
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