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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 70 February 2024 J O U R N A L COMMERCIAL BANKRUPTCIES SPIKED 70% LAST YEAR A ccording to a new monthly bankruptcy filings report covering the calendar year 2023 published by Epiq AACER, commercial Chapter 11 bankruptcy filings increased a whopping 72% over the year, rising from 3,819 in 2022 to 6,569 in 2023. Looking at the bigger picture, all commercial filings increased 19% to 25,627 in 2023 from the 21,479 filings recorded in 2022. Subchapter V elections within Chapter 11 also experienced a sub- stantial increase in calendar year 2023, as the 1,939 filings represented a 45% increase from the 1,334 recorded in 2022. In total, all bankruptcy filings during the calendar year 2023 amounted to 445,186 filings, an 18% increase from the 378,390 recorded in 2022. While rep- resenting a substantial year-over-year increase, total bankruptcy filings remain lower than the pre-pandemic total of 757,816 recorded in CY 2019. "As anticipated, we saw new filings in 2023 increase momentum over 2022 with a significant number of commercial filers leading the expected increase and normal- ization back to pre-pandemic bankruptcy volumes," said Michael Hunter, VP of Epiq AACER. "We expect the increase in num- ber of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt." Overall consumer filing totals for calendar year 2023 were 419,559, repre- Default Servicing senting an 18% increase from the 356,911 consumer filings the previous year. The 175,964 consumer Chapter 13 bankruptcy filings during calendar year 2023 also registered an 18% increase over 2022's to- tal of 149,069. Consumer Chapter 7 filings increased 17% in CY 2023 to 242,936 from 207,188 filings the previous year. "Though still below pre-pandemic figures, bankruptcies in all filing catego- ries climbed last year amid the evapora- tion of pandemic emergency responses, increased interest rates, and tougher lending standards," said Amy Quack- enboss, Executive Director for ABI. "As interest rates remain elevated, increasing geopolitical tensions weigh on global supply chains and debt loads continue to grow, struggling businesses and families can turn to the proven process of bank- ruptcy for a financial fresh start." 2023 U.S. FORECLOSURE ACTIVITY SNAPSHOT A TTOM has released its Year- End 2023 U.S. Foreclosure Market Report, which revealed that foreclosure filings—default notices, scheduled auctions, and bank repos- sessions—were reported on 357,062 U.S. properties in 2023. This is up 10% from 2022 and up 136% from 2021, but down 28% from 2019, before the pandemic shook up the market. Fore- closure filings in 2023 were also down 88% from a peak of nearly 2.9 million in 2010. Those 357,062 properties with foreclo- sure filings in 2023 represented 0.26% of all U.S. housing units, up slightly from 0.23% in 2022, but down from 0.36% in 2019 and down from a peak of 2.23% in 2010. "Reflecting on 2023, we see the recent rise in foreclosure activity as a market correction rather than a cause for alarm. It signals a return to more traditional patterns after years of volatility," said Rob Barber, CEO at ATTOM. "Our data sug- gests that while foreclosure activity may fluctuate, it's unlikely to approach the