October marked the 13th consecutive month where U.S. foreclosure activity decreased on a year-over-year basis, but the month-over-month increase in October was the biggest monthly increase since August 2007.
Counter to the national trend, 28 states and the District of Columbia posted year-over-year increases in overall foreclosure activity in October, including New York (up 10 percent), Pennsylvania (up 20 percent), Ohio (up 4 percent), Georgia (up 22 percent), Virginia (up 15 percent), Massachusetts (up 11 percent), Arizona (up 17 percent), Indiana (up 3 percent), Wisconsin (up 3 percent), and Colorado (up 64 percent).
“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,” Blomquist added. “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.”