Until now some states have suffered more than others from foreclosure with Florida, California and Arizona seeing the highest number of properties repossessed and those property owners with sub prime loans the most likely to lose their homes.
But a growing numbers of American homeowners with solid credit are falling behind on their mortgages. This is taking the foreclosure crisis into the far more numerous prime loans territory where borrowers have decent financial histories.
With many economists anticipating that the unemployment rate will rise into double digits from its current 8.9% foreclosures are expected to accelerate.
'We're about to have a big problem. Foreclosures were bad last year and now it's going to get worse,' said Morris Davis from the University of Wisconsin.
It can only intensify according to Mark Zandi of Economy.com. 'The loss of jobs and loss of overtime hours along with people forced from a full-time to part-time work is resulting in defaults. They're coast to coast,' he explained.
The increasing number of foreclosures is also spawning an increase in the number of private companies offering help to those facing difficulties. One national company, savemefrom foreclosure.com, says it is expanding as it expects more demand. It has just appointed a new partner in New York state despite the fact it is not an area with a high foreclosure rate. 'While foreclosure filings in New York are still not as high as the national average, there are still homeowners in need of prevention expertise in order to stop foreclosure,' said president Dreama Lee.
Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than those with sub prime loans.
Economy.com analysts expects that 60% of the mortgage defaults this year will be set off primarily by unemployment, up from 29% last year.
In the first two months of this year another 313,000 mortgages landed in the foreclosure zone or fell behind by at least 90 days, according to First American CoreLogic. President Obama's administration has allocated $ 75 billion for incentives to lenders to helped troubled property owners and claimed that four million will be saved from foreclosure. But a Treasury Department spokesman confirmed that since it was launched in February less than 55,000 have been helped.
