Foreclosures Skyrocket

From CNNMoney.com - "Foreclosures soar 76% to record 1.35 million":

A record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97%, the Mortgage Bankers Association said Friday.

That's a 76% increase from a year ago, according to the group's National Delinquency Survey.

At the same time, the number of homeowners falling behind on their mortgages rose to a record 6.99%, up from 5.59% a year ago, the association said.

This means that one in 10 borrowers in America are either delinquent or in foreclosure.

Many of those troubled borrowers are in California and Florida, which have among the highest delinquency rates in the nation.

It looks like the subprime is now beginning to taint prime:

The weakened economy and mounting job losses are expected to push these numbers even higher. And that will likely affect homeowners with prime, fixed-rate mortgages, which make up the vast majority of loans and have so far held up fairly well. Until now, much of the housing market's problems were concentrated in the subprime, adjustable-rate market, where homeowners with weak financial backgrounds got loans they ultimately couldn't afford.

"We have not gone into past recessions with the housing market as weak as it is now, so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past," said Jay Brinkmann, MBA's chief economist.

Who's feeling the pain?

California and Florida continue to have the country's highest rates of new foreclosures. These states have about 93,000 and 90,300 of the foreclosure starts in the quarter, respectively, according to the group. The next state, Illinois, is far behind with about 27,500 starts.

California and Florida also lead the nation in job losses, with the Golden State losing 101,300 positions over the past year and the Sunshine State shedding 156,200 jobs.

... Seven other states had rates of foreclosure starts that were above the national average for the quarter: Nevada, Arizona, Michigan, Rhode Island, Illinois, Indiana, and Ohio. But 20 states saw a decline in their foreclosure start rate, due to the moratoriums and modification efforts.

Subprime is really bad. Prime is bad and getting worse:

One in five subprime loans are now delinquent, crossing the 20% threshold for the first time, the group said. That level was up 3.72 percentage points from a year ago.

The number of prime loans past due also increased to 4.34%, up 1.22% from a year ago.

Essentially, the article concludes that this housing mess now comes down to one thing ... it's the economy stupid!

October 2008 Foreclosure Filings Rise Yet Again

As reported by CNNMoney.com - "85,000 homes lost to foreclosure in October":

As government and industry scrambled to stem the housing crisis, another 84,868 homes were lost to foreclosure in October, according to a report released Thursday.

Last month 279,561 struggling borrowers received foreclosure filings, including default notices, notices of auction sales and bank repossessions, according to RealtyTrac, an online marketplace for foreclosures. That's a 5% increase from September, and up 25% from October 2007.

"October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year," said James J. Saccacio, chief executive officer of RealtyTrac, in a statement.

A total of 936,439 homes have been lost to foreclosure since the housing crisis hit in August, 2007.

Mixed foreclosure news out of California:

A new law in California, one of the hardest-hit states in the housing crisis, requires banks to contact struggling homeowners 30 days before delivering a notice of default in order to give them time to restructure their plans.

Thanks to that legislation, foreclosures in the state fell 18% from September. But California still had the highest number of foreclosures in the country for October, logging 56,954 filings. That total was down from a peak of more than 100,000 filings in August, but up 13% from October 2007.

States getting clobbered with foreclosures:

Nevada had the highest rate of foreclosures of any state for the 22nd consecutive month in October, with one in every 74 housing homes receiving a foreclosure filing. Arizona had the second highest rate in October, with one in every 149 housing units in default. Florida was third, with one in every 157 homes there in default.

The housing debacle continues to go on and on. As if tanking housing prices and rising adjustable mortgage rates weren't enough, the severely deteriorating unemployment and economic conditions are beginning to take their toll as well. As if we needed anything else to compound matters.

Foreclosure Capitals: Is Your City Next?

As reported by Forbes - "America's Next Foreclosure Capitals":

The number of homeowners dealing with foreclosure is mounting. Nationwide, almost 766,000 homes received at least one foreclosure-related notice from July through September, according to Realty Trac. That's up 71% compared to the same time a year before.

Expect foreclosures to jump even more in Florida:

Expect already high foreclosure rates in Jacksonville, Naples and Miami to increase by 14% to 15% next year thanks to bottomless home prices and job loss.

"It's so far from recovery," says Doug Duncan, chief economist of Fannie Mae (nyse: FNM - news - people ). He says the ability to sell a home in the Sunshine State is not related to price, especially in the condo sector. "You can drop the price to zero and not sell a brand new property because there's no one there to buy it."

Bad in California too but, perhaps a light at the end of the tunnel:

It's not much better in California, home to five of the top 10 cities on our list, including Fresno, Santa Cruz, Merced and Santa Barbara. Here, foreclosures are expected to rise between 11% and 14% next year. Job growth figures are better than in Florida, and new housing permits have begun to bottom out, cutting into supply. Even though prices are down, transaction activity has surged 17% in San Diego, 21% in Los Angeles and 32% in Sacramento from last year, according to Radar Logic, a New York-based research firm.

"We're starting to see signs of a bottom in some places in California," says Scott Hoyt, a senior director of consumer economics at Moody's (nyse: MCO - news - people ) Economy.com. "Those places were the first places to crash. Now they're further into the foreclosure cycle. It looks like permit activity is starting to bottom out."

The Forbes foreclosure capital list - (full article and the data behind this list):

1. Jacksonville, FL
   
2. Fresno, CA
   
3. Naples, FL
4. Miami, FL
5. Orlando, FL
6. Santa Cruz, CA
   
7. Merced, CA
8. Oxnard, CA
9. Deltona, FL
10. Santa Barbara, CA

For now, the cries will continue ... when will this disastrous housing market ever find a bottom?

More Foreclosures

If you have problems viewing the Bloomberg video below, "Housing Defaults For September; Highest Metro Foreclosure Rates", you can find the video directly by clicking on the link we have provided:

Housing Defaults For September; Highest Metro Foreclosure Rates

California Legislation Responsible for Drop in Mortgage Defaults?

The legislation:

"California State Senate Bill 1137, which went into effect Sept. 8, imposes significant new requirements on lenders prior to filing for foreclosure - including the requirement that servicers contact homeowner borrowers to explore options for avoiding foreclosure on their primary residence at least 30 days before filing a notice of default." - (Housingwire)

The results:

"Recent legislation in California helped push notice of default filings, which indicate the start of the foreclosure process, down 61.8 percent in September, according to a recent report released earlier this week. ForeclosureRadar, which published monthly foreclosure data, found that only 16,352 notices of default were filed in September, down from 42,790 in August, and a decrease of 36.4 percent from a year earlier." - (Housingwire)

The bad news:

The bill did not directly impact foreclosure sales; however, the number of foreclosure sales in the state still fell by 12.4 percent. Despite the monthly drop, properties taken to sale at auction increased 163.2 percent from the prior year, to 23,409 sales, with a combined loan balance of $9.75 Billion. - (Housingwire)