California foreclosure filings in September flattened from the previous month but remain well above the levels from a year earlier, according to ForeclosureRadar’s monthly foreclosure report. From August, filings in California increased only 1.08% in September, but the volume has grown by 123% from last year. The report attributes the spike to the dramatic drop in filings in September 2008 after CA Senate Bill 1137 went into effect, requiring lenders to contact borrowers before filing a Notice of Default. Since government intervention began in September 2008, foreclosure sales remain stunted, dropping 8.6% from the previous month and 40.6% from a year ago. But the percentage of foreclosures sold to third parties, who are usually investors, grew by 215% from last year and 3.27% from August, according to the report. As California experiences a flattened foreclosure rate, Arizona leads all states with an increase of filings by 36.1% in September, according to data from ForeclosureListings.com. Following Arizona’s lead was Florida’s 29.6% jump; Texas’ 24.3% increase; and Michigan’s 18.22% climb. Urban areas were hit hardest and spurred the increases. In Arizona, the statewide increase was fueled by a massive 81.3% increase in Phoenix foreclosures. Other major markets saw spikes as well. Foreclosures in Las Vegas jumped 47.4%; Atlanta had a 39.9% increase; Chicago’s rates climbed 36.2%; and Houston had a 33.2% spike in foreclosures, according to ForeclosureListings.com Foreclosure sale prices in Arizona increased by 113.6% in September, leaping from $101,000 to $215,826. Georgia followed with a 45.4% jump in prices as the average price went from $129,187 to $187,906. The only state to see a price decrease was Vermont with a drop of 2.4%. “These statistics show that the foreclosure markets are still volatile but that houses are gaining rapidly in value. For the savvy investor who can afford risk, now is a great time to get involved,” according to the ForeclosureListings.com report. Foreclosure filings in Q309 increased to a level unseen since RealtyTrac began reporting the figures in January of 2005. Write to Jon Prior.