Foreclosure Filings Rise 25% in October, Initial Unemployment Claims Rise

According to RealtyTrac, 279,561 borrowers received foreclosure filings in October 2008, a 5% increase from September, and a 25% increase from October 2007.  Nearly 85,000 houses were lost to foreclosure in October 2008.  California, which continues to have the highest number of foreclosures in the country, benefited somewhat from a new law requiring banks to contact struggling homeowners 30 days before delivering a notice of default, in order to give them time to restructure their plans.  Foreclosures in California fell 18% from September, indicating that the new law has had some affect, if only to delay the inevitable.  

It will likely be some time before the various mortgage modification programs introduced by banks and the FDIC in the past few weeks have any affect on slowing down the rate of foreclosures.  Furthermore, it is unclear how much the positive effects of these modifications will be outweighed by an increasingly unstable employment and economic picture.  Initial unemployment claims reached 516,000, the highest since Sept. 2001.  Continued unemployment claims are at the highest level since 1983.  Certainly, the news continues to be bleak.  Many "pundits" are now calling for a recession the likes of which the country hasn't seen since the Great Depression.  Former Goldman Sachs chairman John Whitehead was quoted as claiming that the current slump will be worse than the Great Depression.  Although I certainly believe we are in for one heck of a nasty recession, I respectfully disagree with Mr. Whitehead.  But for those who are interested, here's a nifty graph of what happened to GDP during those difficult times.  Please make sure to take anti-depressants before looking at the graph.