The first three quarters of 2008 have seen a continued increase in foreclosure deeds. According to Warren Group, Publisher of Banker and Tradesman, Massachusetts’ foreclosure rate soared 70 percent as compared to the first three periods of last year.

Although foreclosure filings declined in the third quarter due to the new state law imposed last May which postponed the first step of the foreclosure for delinquent homeowners, it was but temporary. For most of these delinquent homeowners, the 90-day suspension is over and most of them were not able to cure their delinquencies.

As the year is about to end, analysts are expecting a recession-level foreclosure rate not only in Massachusetts, but nationwide. Although data regarding completed foreclosures are not readily available, analysts believe that the number is huge.

Looking back, in the year 2007, the increase in foreclosure rate climbed 70 percent higher than it was in  2006. This raises the question as to why this had been happening and what could be done to stop the steady increase.

Last year, the Community Affairs of Boston presented a discussion paper outlining the possible reasons and solutions to this Massachusetts crisis. Contrary to common belief, unemployment is not a major contributor as research shows that employment in Massachusetts had been steadily growing since 1993. An analysis showed that rising mortgage payments is one of the causes of rising foreclosure rates. Many homeowners were attracted to adjustable-rate mortgages, also known as “teaser rates,” because of low initial payments. Many homeowners in this type of mortgage have seen a dramatic increase in their payments in a fairly short time after origination.

Another reason is the weakening housing market that Massachusetts had been experiencing in recent years. However, the worst culprit could be the increased number of sub-prime adjustable-rate mortgages, not only in Massachusetts but also nationwide. With all these causes combined, foreclosure rates may continue to increase.