massachusetts +11% new york +10% 




when home prices rise for years, foreclosure filings become rare because defaulting homeowners can usually sell the home for more than they owe and pay off the mortgage. the problem arises when home prices fail to rise locally, and it balloons when home prices fall. we<u+2019>ve seen that last time around. after bouncing along super low levels during housing bubble 1 through 2005, foreclosure filings skyrocketed during the housing crash starting in 2006. at first it was just an uptick that no one paid attention to. by 2008, it helped take down the financial system. 




foreclosure filings peaked in late 2009, began dropping in 2010, and then tapered down to 2006 levels as foreclosures were processed, and as the home price surge of housing bubble 2 made new defaults less likely. but the spike in october stands out as much as those in the early phases of the housing bust in 2006 and 2007. note the blue bar on the right : 









while some states are still trying to digest the foreclosures from the last housing crisis, according to daren blomquist, senior vp at attom, <u+201c>the foreclosure activity increases in states such as arizona, colorado and georgia are more heavily tied to loans originated since 2009 <u+201d>: 




<u+201c>the loans used in this housing recovery that appear to be most susceptible to foreclosure are those such as fha and va with low down payments. our data shows fha and va loans combined represent 49% of all active foreclosure inventory for loans originated in the seven years ending in 2015.<u+201d> 




this chart shows the soaring proportion of fha and va mortgages issued since 2009 among the active foreclosure inventory. 









on average across the nation, the foreclosure rate was one foreclosure filing for every 1,258 housing units. but in some states, the foreclosure rate was much worse. here are the <u+201c>top<u+201d> ten: delaware: one in every 355 housing units new jersey: one in every 564 housing units maryland: one in every 679 housing units illinois: one in every 704 housing units south carolina: one in every 801 housing units nevada: one in every 826 housing units florida: one in every 895 housing ohio: one in every 930 housing units pennsylvania: one in every 1,018 housing units georgia: one in every 1,028 housing units. 




and here are the <u+201c>top<u+201d> ten highest foreclosure rates among the 216 metropolitan areas with a population of over 200,000: york-hanover, pa: one in every 274 housing units atlantic city, nj: one in every 301 housing units rockford, il: one in every 481 housing units columbia, sc: one in every 498 housing units trenton, nj: one in every 499 housing units. reading, pa: one in every 542 housing units chicago, il: one in every 571 housing units dayton, oh: one in every 573 housing units philadelphia, pa: one in every 597 housing units salisbury, md: one in every 625 housing units. 




these <u+201c>foreclosure filings<u+201d> are based on data that attom gathered in 2,200 counties where over 90% of the us population lives. they include data on the three phases of foreclosure: foreclosure starts: lender issues notice of default (nod) and lis pendens (lis) auction notices for future public foreclosure auctions: notice of trustee<u+2019>s sale (nts) and notice of foreclosure sale (nfs); real estate owned (reo) properties that have been foreclosed on and were repurchased by a bank at auction and are now held by the bank. 




broken down based on these three phases of the foreclosure process: 




foreclosure starts jumped 25% in october from the prior month, to 43,352. while still down 11% year-over-year, it was the highest monthly increase in foreclosure starts since december 2008. 




foreclosure starts increased even year-over-year in 23 states and washington d.c. in some states they soared. the <u+201c>top<u+201d> five: colorado +71%
wolf richter: what the heck<u+2019>s going on with foreclosures? why this spike?
yves smith