Foreclosures Just Getting Started

From Bloomberg:

Foreclosures Rise 48% in May as Repossessions Double

Banks repossessed twice as many homes in May and foreclosure filings rose 48 percent from a year ago as falling house prices trapped borrowers in mortgages they couldn't afford, RealtyTrac Inc. said in a report today.

One in every 483 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said. That was the highest rate since the Irvine, California-based company began reporting in January 2005 and the 29th consecutive month of year-over-year increases. Nevada, California and Arizona posted the highest rates in the U.S. and New Jersey entered the top 10.

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If you thought that US housing woes were starting to subside think again, the chart above comes courtesy of Hussman funds and shows that adjustable rate mortgage resets are just starting to kick in in earnest. Expect losses to ratchet up in the coming months for banks and expect earnings expectations for a second half rebound to diminish.