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There was an October surprise in the housing market: ATTOM Data Solutions reports there was a total of 105,481 U.S. properties with foreclosure filings last month, up 27 percent from the previous month. And while this was greatest monthly increase since August 2007, it should be noted that September marked a 129-month low in foreclosure filings and October’s level was eight percent below the level set a year ago.
Still, 28 states and the District of Columbia posted year-over-year increases in overall foreclosure activity in October, including Colorado (up 64 percent), Georgia (up 22 percent) and Pennsylvania (up 20 percent). The states with the highest foreclosure rates in September were Delaware (one in every 355 housing units with a foreclosure filing), New Jersey (one in every 564 housing units), Maryland (one in every 679 housing units), Illinois (one in every 704 housing units) and South Carolina (one in every 801 housing units).
“While some states are still slogging through the remnants of the last housing crisis, the foreclosure activity increases in states such as Arizona, Colorado and Georgia are more heavily tied to loans originated since 2009—after most of the risky lending fueling the last housing boom had stopped,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “The increase in October isn’t enough evidence to indicate a new foreclosure crisis emerging in these states, but it certainly demonstrates that this housing recovery is not completely devoid of risk. 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 percent of all active foreclosure inventory for loans originated in the seven years ending in 2015. By comparison, FHA and VA loans only represent 12 percent of all active foreclosure inventory among loans originated in the previous seven-year period, from 2002 to 2008.”