National figures point to a rise in foreclosures. Of course this chart represents the entire 8 trillion dollar mortgage industry. The foreclosure rate among sub prime mortgages which represent approximately 20% of the mortgage market is about 5%.
We are increasingly seeing lenders realize that as loans begin to adjust the homeowners are experiencing payment shock, rapidly forcing people into late payments and exacerbating the tight financial situation in middle class households. This is forcing people to desperatly try to refinance their mortgage or put their home up for sale. The amount of homes for sale will dramatically increase as $1.5 trillion dollars of adjustable rate mortgages reset this year and force people to downgrade or leave the dream of home ownership behind altogether. I think the old maxim holds true that things usually get worse before they get better.