A Slow Drip of Desperation: The Rise and Fall of Virginia’s Pre-Foreclosure Crisis

Late every night, after putting her children to sleep, Melissa Carter sits at her kitchen table in Richmond, staring at the stack of bills piling up. Her mortgage payment—once manageable—now feels insurmountable, weighed down by rising costs, unexpected medical bills, and a paycheck that doesn’t seem to stretch as far as it used to. “I worked hard to own this home,” she says softly, shaking her head. “I never thought I’d be at risk of losing it.”

Melissa isn’t alone. Across Virginia, financial strain is quietly driving more homeowners into pre-foreclosure—a stage where missed mortgage payments trigger warnings from lenders but the home hasn’t yet been seized in foreclosure proceedings. Though the numbers suggest improvement over last year, for those at risk, the fear of displacement is just as real.

The Numbers Behind the Crisis

In September 2024, Virginia recorded 504 pre-foreclosure cases, marking a slight uptick of 2.86% from the 490 cases reported in August. At first glance, the comparison to September 2023 is more encouraging: that month saw 704 pre-foreclosure properties, meaning this year’s figure marks a notable 28.41% decline—a possible sign of stabilization in a housing market that has been in turmoil for years.

Even so, numbers only tell part of the story. While fewer people falling into pre-foreclosure compared to last year is promising, the fact that over 500 families are still at risk this month alone suggests that economic hardships remain ever-present.

The Long Tail of a Housing Crisis

Virginia’s pre-foreclosure rates have followed the arc of the national housing crisis over the past two decades. In 2010, at the height of the Great Recession, the state recorded a staggering 50,115 pre-foreclosures—one of the highest rates in recent history. From there, numbers steadily declined as the economy recovered, reaching an all-time low in 2021, with just 26 cases reported for the entire year—a direct result of federal pandemic-era protections against foreclosure.

But as soon as those protections expired, distress signals started flashing. 2023 saw 8,129 pre-foreclosures across Virginia, and while 2024’s early numbers suggest a potential decline from that peak, homeowners like Melissa are finding little reason to celebrate.

“I know things are ‘better’ for the market,” she says. “But what about me? What about my neighbors?”

Why Homeowners Are Struggling?

Economic factors like inflation and wages that have failed to keep up with rising housing costs continue to push more families toward the edge. Rent and mortgage payments alike have surged, even as some pandemic-era financial assistance programs have disappeared.

The Federal Reserve’s interest rate hikes—intended to combat inflation—have made refinancing a costly endeavor, leaving many homeowners locked into payments they might have once handled but no longer can. Unemployment in some sectors, particularly service and retail industries, has made matters worse. For families living paycheck to paycheck, even a few missed payments can mean disaster.

“I was out of work for just two months,” says Michael Turner, who recently received a pre-foreclosure notice in Norfolk. “Two months was all it took to fall behind. And now they’re saying I could lose my home?”

What Comes Next?

For many homeowners in pre-foreclosure, options still exist. Banks may offer renegotiated payment plans, and in some cases, government-backed assistance programs can help close financial gaps. But navigating these solutions requires knowledge and swift action—two things that overwhelmed homeowners may not have access to.

Meanwhile, market analysts remain cautiously optimistic. If the current pace holds, 2024 could see fewer pre-foreclosures than 2023, marking a reversal of post-pandemic trends. But that doesn’t mean the crisis is over. A single unexpected financial event—a medical emergency, a layoff, a sudden car repair—can be enough to send a family into mortgage distress, sometimes within just months.

For Melissa, Michael, and countless other Virginians, the real concern isn’t what the data says but rather what comes next.

“Tell me when things actually get better,” Melissa says, folding her hands over the pile of overdue statements. “That’s the only number I care about.”