Which states are seeing more foreclosures now that federal moratorium has ended?

Will there be a wave of foreclosures now that foreclosure moratoriums have been lifted? Experts say probably not – but there may be a steady uptick in activity as we close out the year.

According to a new report from ATTOM Data Solutions, foreclosure filings fell 4% in July but were up 40% compared to the year prior.

That was before the government's national foreclosure ban expired, though, when only certain foreclosures (largely homes that were already vacant or abandoned) were allowed. Now that the ban is over, the majority of delinquent homeowners can be foreclosed on – that is, as long as they're not on a forbearance plan and their servicer follows the myriad loss mitigation rules set out by the Consumer Financial Protection Bureau.

► Worried about foreclosing?  New rules aim to give homeowners options to cope with mortgage struggles

► What now? Biden administration offers new aid for mortgage borrowers at risk of foreclosure due to COVID-19

Due to these protections, the “wave” of foreclosures that many previously predicted may be more of a reliable flow.

Here's how Rick Sharga, executive vice president of foreclosure platform RealtyTrac, put it: "The end of the government's moratorium won't result in millions of foreclosures, but we're likely to see a steady increase in default activity for the balance of the year. Much of the foreclosure volume will come from the reinstatement of foreclosure proceedings on properties that had already been in default prior to the pandemic and new foreclosure activity on vacant and abandoned properties.”

Where we may see more foreclosure filings

Distressed properties are a popular option for investors – and though a wave of them may not be in the cards, a steady trickle is still an improvement, particularly in this inventory-strapped market.

To get a feel for where investors may find more of these distressed properties, a look at ATTOM's July data can help. According to the numbers, 23 states saw increases in foreclosure starts. Washington, D.C., had the biggest uptick, with a 233% jump from June to July. Delaware, Colorado, and Oklahoma all have 100% or higher increases as well.

At the metro level, New York City has seen the biggest jump in foreclosure filings, with a whopping 134% increase over the year. Riverside, California; Chicago, Atlanta, and Houston rounded out the top five for increases (though Houston's was just 23%).

Total foreclosure rates – the number of foreclosure filings as a share of overall housing stock – were highest in Nevada, where one in every 3,626 housing units was foreclosed on. Delaware, New Jersey, Kansas, and Illinois also had high rates.

The Millionacres bottom line

While all these numbers are from July – with the foreclosure ban still in place – they do indicate places to keep an eye on, both now and down the line. As these already-started foreclosure filings finish out, it should lead to an uptick in distressed properties in these areas, opening up some much-needed inventory for investors.

Keep in mind that even with the foreclosure ban lifting, there are still mortgage forbearance options in place. Until those run out (which, for some, is quite a while), many delinquent borrowers still have protection – as do their properties.

The Motley Fool has a disclosure policy. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from Millionacres is separate from The Motley Fool editorial content and is created by a different analyst team.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Unfair advantages: How real estate became a billionaire factory

Offer from the Motley Fool: You probably know that real estate has long been the playground for the rich and well-connected and that according to recently published data, it's also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it's no surprise why.

But those barriers have come crashing down - and now it's possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.

To get started, we've assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.