They are caused by job loss and ARM resets. When there’s no robust appreciation, people aren’t using their homes as ATM’s. That isn’t that common out here. Also, the article you cite about Denver foreclosures suggests that these foreclosures are particularl widespread in the bottom part of the market, so probably low quality loans and easy money to people who wouldn’t ordinarily qualify is another reason.
Don’t forget, the Denver market seems to have appreciated, but it is due to the number of sales of higher end properties, not those in the middle or bottom. This fact has been repeated in the real estate section of the Rocky Mountain News for at least three years, with realtors having to explain to sellers expecting to jack up their listing prices that there has been no real estate bubble in our area, so sellers must lower their expectations. The Denver market only looks overvalued because of the number of higher priced homes sold, not the mix of homes sold. I hope this clairfies matters.
