Rising Foreclosures Lead Homeowners to Seek Legal Assistance: Insights from LegalShield
Homeowners in the U.S. are increasingly seeking legal assistance due to rising foreclosures. LegalShield reports the highest level of foreclosure-related legal requests since March 2020. The data from the LegalShield Consumer Stress Legal Index (CSLI) highlights significant increases in foreclosures and legal concerns tied to financial pressures. In March alone, the Foreclosure Index rose by 13.4%, marking a 20.3% increase over the past year, indicating a shift from financial concerns to legal action.
Alongside the rise in foreclosures is a notable increase in Google searches for mortgage assistance, reaching unprecedented levels in the first quarter of the year. While Google searches signal early-stage consumer concern, the LegalShield index captures when individuals pursue formal legal help, showing a shift from passive worry to active response among homeowners.
Chris Peoples, a lawyer with LegalShield, notes that individuals often seek legal advice as issues become pressing. Matt Layton, LegalShield's senior vice president of Consumer Analytics, explains that when both Google searches and legal inquiries rise, it suggests a potential surge in court filings within the next six months.
The LegalShield CSLI tracks legal service demand nationwide, providing insights derived from real interactions rather than survey data. The Foreclosure Index emphasizes growing pressures on property owners, partly due to increased insurance and tax costs. A recent Federal Reserve Bank of Dallas study found homeowner insurance premiums have risen by approximately 70% from 2019 to 2025. This increase contributes to 14% of mortgage payments on average, up from 10% in 2013, and is linked to higher rates of mortgage delinquency.
The housing market's strain is further reflected in declines in both the Housing Construction and Housing Sales Indices, indicating reductions in new builds and sales inquiries. Despite a temporary decrease in the Consumer Finance Index due to tax refund season, financial pressures persist, evidenced by a 2.0% increase in the Bankruptcy Index for the first quarter. This index has doubled since interest rate hikes began in 2022, suggesting potential future increases in bankruptcy filings based on historical data.
LegalShield continues to monitor these trends as part of its broader analysis of economic impacts on U.S. households. Over its extensive history, LegalShield has served as a valuable indicator of macroeconomic fluctuations, using its expansive data set to predict shifts in consumer financial health and behavior.