From the Boston Herald:

The Warren Group reported Thursday that 993 foreclosure deeds were recorded in October, compared with 799 in September. October’s foreclosure deeds also were 34 percent higher than in October 2007, when 739 were recorded.

October’s numbers remain below spring and summer statistics, when foreclosure deeds routinely exceeded 1,000.

But for the year, foreclosure deeds are up 68 percent, with 10,603 through 10 months this year, compared with 6,332 at the same time last year.

Lenders did initiate 33 percent fewer foreclosure petitions in October, with 1,507 filed last month, compared with 2,258 in September.

The foreclosure deeds (which are the final step in the foreclosure process when the bank actually takes the home) filed in October were initiated in many cases nearly a year ago so we are looking at initiations from the end of 2007 or early 2008.  But as the data shows, foreclosure petitions (the first step, and not all of them actually end up in foreclosure by the way) are down 33%.  The foreclosure rate looks to be slowing as more and more banks look for alternatives to foreclosure like mortgage refinancing or quicker short sale approval  I've been seeing that anecdotally on the street level as banks look for alternatives and in the data as well.

As I wrote a couple days ago, the foreclosure problem in Massachusetts is not as bad as some other parts of the country, but a slowing pace of foreclosures is a good sign for the housing market here.  Statewide, inventory is coming off the market and prices have come down to points where they are more affordable creating more sales activity which all points to a bottoming of the market.  And now if the pace of foreclosures continues to slow, we'll have less "distressed" inventory on the market so some of that drag on the market will be eased.  Not going to happen overnight, but signs point in the rigt direction.

I guess the question becomes, is a taxpayer funded housing stimulus package required for the housing market if the market appears to be naturally correcting itself (at least in Massachusetts)?  Well, the larger economic picture is a big concern at this point unfortunately so it may be wise to continue to pump stimulus into housing and financial markets to try lessen the severity of the recession.  Job reports have been bleak, consumer spending is down, and the stock market has been getting hammered so it looks like the Fed is poised to lower rates again and of course there is still more than 1/2 of the $700B bailout package left to utilize.  Some of that put directly towards housing is not a bad idea to keep the market moving in the right direction.