No matter how you slice or dice it, the housing market is bad and keeps on being bad. As reported today by RealtyTrac, foreclosure activity in the third quarter saw "one in every 136 U.S. housing units received a foreclosure filing during the quarter: the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005." "Housing rebound" - meet facts.

RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.



Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.



“Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”

If indeed the limitation on REO activity is coming to an end, look for foreclosed inventory to start hitting the market in earnest, thus keeping the onus on the Fed to preserve mortgage rates as low as possible (read a QE extension is virtually guaranteed) as every sub 5% new and refi loan will be milked to the maximum by all those who believe it is their sworn duty to reflate the housing bubble.

As for where the pain continues to be greatest: no surprise as the usual suspects rear their post-last bubble head: California, Florida, Arizona, Nevada, Illinois and Michigan.