Back in mid-2006, nearly a year before I launched ForeclosureRadar.com, I wrote an article for iTulip.com to help Eric's readers better understand current foreclosure statistics. In it, I introduced the fact that there is a base rate of foreclosure that happens regardless of the housing market. This base rate of foreclosure being due to the Five D's: Death, Disease, Drugs, Divorce, Denial.

From the time I started buying foreclosures, through writing that article in mid-2006, the housing market was booming. Selling most homes was easy, and anyone with a pulse could get a loan (one lender actually went as far as to advertise a "pulse loan"). In this environment, many found it hard to believe that foreclosures even occurred. I initially struggled to make sense of it myself. Why would there ever be homes with tens or even hundreds of thousands in equity being sold at the foreclosure steps? Building this list bridged that gap for me. While the Five D's now represent a small percentage of the foreclosures that we see, I still feel it is an important part of the larger story.

I've wrestled a bit with whether this list is right or not over the years. Some have argued that drug use is a disease, or that denial is a cop-out/catch-all. I had even added a 6th at one point, Duty, as our service members began losing their homes while serving in Iraq. I've since dropped Duty as part of the base rate, as I sincerely hope that it is a temporary problem that will not continue. After all the arguments, this is the list that continues to stick. Let's take a quick look at each:

There's an awful lot of debate about who is to blame for the current foreclosure crisis and who should, or should not, be bailed out. Some folks are down right angry.

My father was a logic and philosophy professor. As a kid growing up I was allowed to do almost anything I wanted so long as I could make a valid argument for doing it. This was much harder than you might expect thanks to the many fallacies that rendered my arguments invalid in my father's eyes. That my teacher said it was true didn't make it so (the appeal to authority fallacy). But of all the fallacies that my father used to thwart my plans, the one I remember best is the post hoc ergo propter hoc fallacy - which says that just because something happened first doesn't mean it CAUSED what happened next.

Subprime loans were the first to foreclose, but that isn't enough to prove subprime lending caused this crisis. Speculation is correlated with foreclosures, but is it really the cause?

Peter Viles over at the LA Time's LA Land Blog brought U.S. Representative's Laura Richardson's foreclosure to my attention and wondered if I could shed some light on the contradiction between the reporting that her 2nd home in Sacramento had been foreclosed on (which we confirmed), and her office's statement denying the foreclosure.

Lets dissect the statement one claim at a time:

DataQuick release their April sales report today for CA which showed a 26.8% increase in sales over the previous month. Great news and confirms the reports I've been getting from my Realtor friends that things are picking up.

But is the worst really behind us?

Some believe so, in this CNBC report respected investment researcher Charles Biderman predicts that all the REO inventory will be gone by June. Click here to watch.

Thanks to a new addition to DataQuick's monthly CA Sales Report which tells us the percentage of monthly home sales that are bank resales, we can now quite easily see just how well banks are actually doing on getting rid of inventory.

I've been regulalrly interviewed about the foreclosure crisis since starting our California Foreclosure Report in March of last year. As the numbers continue to increase each month, I often get asked "Is there any good news?" I've had the same answer all along, and a report today from Wells Fargo and the National Association of Homebuilders confirms it - foreclosures are bringing affordability back to California.

If you look at the NAHB press release or the headlines today on this story you'll miss my point. They make it qute clear that California dominates the list of LEAST affordable homes in the nation. What the press release and the headlines miss is how much California has improved!!!

Let's start with improvements in affordability since Q4 2005, one of the lowest points in affordability for California. Nationally affordability has impoved 24% since that time. Now check out the 15 most improved areas in the nation according to data I pulled from the Wells/NAHB report: