Remember, long lags

The AP is reporting a massive increase in foreclosures for the month of August, and the unstated news is that things will most likely get worse:

The number of foreclosure filings reported in the U.S. last month more than doubled versus August 2006 and jumped 36 percent from July, a trend that signals many homeowners are increasingly unable to make timely payments on their mortgages or sell their homes amid a national housing slump.

A total of 243,947 foreclosure filings were reported in August, up 115 percent from 113,300 in the same month a year ago, Irvine, Calif.-based RealtyTrac Inc. said Tuesday....

The number of bank repossessions jumped to 42,789 in August, compared with 20,116 a year earlier, the RealtyTrac said. In July, there were 26,842 bank repossessions.

A significant portion of these foreclosure proceedings are from early wave ARMs resetting to higher rates, but these rates would have been determined in July. With the mortgage market freezing up in August, and short term LIBOR rates markedly higher today than six weeks ago, as well as a larger population of people who are either facing resets or refinancings into a more difficult market, big trouble is coming fast.