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An article I saw over the weekend in the newspaper indicates that we are going to see a big jump in foreclosures soon, and this wave could last a while. Here In Connecticut, foreclosure filings increased in the 3rf quarter, but are rate of increase is still below the national trend. That, however, could change in the next few months as a new wave of Variable-rate mortgages reset.

Third-quarter fillings increased by 10% in Connecticut, over the same period a year ago. Foreclosure filings in this state increased 69% in the third quarter compared with the second quarter.

In our state, approximately 1 in every 281 households received a filing during the three-month period. Connecticut, which had the eight highest foreclosure rate in the nation in January of 2008, is now ranked 25^th.

Nationally, foreclosure filings jumped to 937,840 during the quarter, a 23% increase from the third quarter of the previous year. Across the nation, one in every 136 households received a foreclosure notice during the third quarter.

Across the country, the states of Arizona, California, Florida, Illinois, Michigan and Nevada accounted for 62% of the nation’s foreclosure activity in the third quarter with 579054 filings. California led the way with 250,054 foreclosure filings, accounting for nearly 27% of the country’s total.

Experts expect the numbers to get worse in the coming months because many of the variable-rate mortgages taken out in the past 5 years have yet to encounter their first interest-rate reset period, which in many cases occurs only after the first three to five years. The majority of the first wave of mortgage defaults were caused by variable-rate mortgages that reset after being fixed for two years, resulting in severe shock for a lot of borrowers. Now we will be seeing mortgage rates reset on the sub-prime loans that had fixed rates for a three to five year period.

Over the next few months, we are going to see the start of a new wave of variable rate mortgages resetting, in combination with an economy that has a lot of people either losing their jobs, losing their overtime, or getting their hours cut.