More from my favorite housing bubble blog:

There are 40,000 homes in some state of foreclosure in Colorado amid a devastating housing crash.

We have seen it before -- foreclosures everywhere, a real estate industry in the toilet, condos for pennies on the dollar, financial devastation everywhere you looked. Welcome back to the future, Colorado housing crash 2006 style.

Colorado on Wednesday launched the nation's first statewide foreclosure hotline, which came out on the same day a national study said the state continues to be plagued by the highest foreclosure rate in the country.

The hotline, 1-877-601-HOPE, is expected to help at least an estimated 40,000 homeowners in some stage of foreclosure in Colorado, said Zach Urban, program manager for Denver-based Brothers Redevelopment, which has been hired by the Division of Housing to administer the program.

The Division of Housing contributed $250,000 to kick off the hotline. Also, the attorney general's office is going to contribute money it receives from lender Ameriquest as part of a $295 million national settlement involving predatory lending practices. The Colorado Association of Realtors is contributing $30,000, and JPMorgan Chase is kicking in $12,500, Williams said.

The $500,000 cost may seem like a large amount but could stem the tide on a problem whose impact goes beyond the 14,205 foreclosures reported through September, a 32.3 percent increase from 2005, according to the Division of Housing.

"We're trying to stop the bleeding," Williams said.

She said a lack of price appreciation in homes, risky creative financing such as adjustable rate mortgages and interest-only loans, slower economic growth during the past few years, predatory lending practices, and scams are contributing to rising foreclosures.