Foreclosure pressure in the South is at its
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“What our data is showing is essentially two housing markets inside one country,” said Matt Layton, senior vice president of consumer analytics for LegalShield, in a press release Tuesday. “The West is the lone outperformer, the only region running above prepandemic norms across foreclosure, construction and sales simultaneously. The rest of the country is under pressure, and the South is where that pressure is most acute.”
LegalShield’s April foreclosure index rose 46.4% year over year to 52.4 in the South, which led the country in building and buying from 2020 to 2022. The escrow consequences of that have reshaped monthly payments, the report said.
“What’s driving the foreclosure calls in the South isn’t the principal and the interest, it’s the escrow,” said Ben Farrow, LegalShield provider attorney and partner at Anderson, Williams, & Farrow, LLC, in the release. “Homeowners insurance and property tax increases have quietly reset the total monthly payment higher on loans people thought were stable. That payment shock is what’s moving people from financial stress to legal action.”
The housing construction index in the South also fell 3.3% year over year, while the home sales index increased 5.7% annually but was still 10.2% below February 2020 levels.
The foreclosure index in the West spiked 21.8% year over year to 35, which was the lowest regional reading in the country and 29.6% below prepandemic levels. The housing construction index rose 4.5% annually to 146.3, the only region above its prepandemic average, while the housing sales index also jumped 11.9% from April 2025, the strongest sales rebound in the country and again the only region above prepandemic norms, according to the report.
“The West is the one part of the country where all three signals are pointing in the right direction at the same time,” Layton said. “That’s a fundamentally different housing environment than what we’re seeing in the South or the Midwest.”
The Midwest foreclosure index was the highest of any region at 55.4, increasing 11.2% year over year. Meanwhile, the Northeast was the only region where foreclosure pressure declined, dropping 10.4% annually to 52.5.
The national foreclosure index reached 49.7 in April, up 13.5% year over year and 71.3% from April 2021. April was the second straight month at the highest sustained level since spring 2020. The construction index also fell 1.4%, and the sales index ticked up 1.3%, the report found.
“What we flagged in April as an emerging foreclosure trend has now sharpened into a regional story,” Layton said. “The direction we predicted is unmistakable. This is nowhere near a 2008-style crisis, the Great Recession peak was 283.2 in March 2009, and we’re at 49.7, but foreclosure pressure is now in its second consecutive year of double-digit gains, and the South is bearing the heaviest load.”
Attom’s May foreclosure report showed similar trends. Southern states, Florida and South Carolina, posted the worst foreclosure rates in the country last month, followed by Maryland, Nevada and Indiana. Cleveland and Baltimore recorded the worst rates among retro areas with a population of at least 2 million. Tampa and Orlando, Florida, also cracked the top five.
Nationally, foreclosures hit 40,355 in May,
“Foreclosure starts and completed foreclosures both increased compared to last year, reflecting ongoing pressure on some homeowners as
