From this article on Reuters:
http://www.reuters.com/article/hotSt...49823320080129
In 2007, there were more than 1% nationwide, a 75% increase over 2006.
Nevada's foreclosure rate led the nation, with 3.4 percent -- more than three times the national average -- of households entering the process, RealtyTrac said. It had the highest foreclosure rate during every month in 2007.
Florida and Michigan had the second- and third-highest foreclosure rates, at 2 percent and 1.9 percent, respectively
Those are just a few highlights, but it's a good overall article with a lot of statistics and it discusses many of the factors that have led to the crisis. Personally, I never knew anybody who foreclosed on their house until the past year. I can name 6 off the top of my head now... and those are all people I interact with on a regular basis. In Michigan, much of it is due to the high unemployment rate. People who used to make 6 figures are suddenly without income and they can't sell their houses because the housing market is so poor. Two people that I know had extenuating personal circumstances. One co-worker had breast cancer and was on medical leave for months at 60% of her pay. She couldn't pay the mortgage on that and had to walk away from her house.
Another also had breast cancer and had to go on a totally unpaid leave for 4 months. Since she was off for more than the 12 weeks allowed by FMLA, when she went back to work, they made her part time and have given her no more than 28 hours of work a week. This was after 29 years of employment with her employer. To try to keep up with the bills they accumulated while she was on medical leave, they refinanced their house. The house was appraised at $185K, which was WAY higher than they could have sold it for. The refi was for $180K. Her husband was disabled and passed away this past November. She's getting nothing from his pensions or social security until the year that he would have received retirement benefits (he was 57 when he died). She can't afford the mortgage payment on her current pay/hours and the job market is truly awful. She's going to lose the house, but is hanging on there as long as she can. She has one kid in college and is raising her two grandkids. It's a really sad situation and a strong testimony as to why you should have life insurance outside of your employer. Her husband had been insured under his employer until he went on disability. Then, he couldn't qualify for life insurance because he was disabled. I desperately wish I could help her somehow... I just have to keep trying to win that lotto I guess!
While I agree that people should be very careful about paying attention to their loan terms, the mortgage companies did make it too easy to borrow too much. If someone appraises your house at $185K, you believe it's really worth that. It never was worth that much and they never should have loaned them that much money.
Another big problem that I see all over is that people took out home equity loans to pay off higher interest credit cards and so they have no equity in their homes. This was attractive because mortgage rates were low and credit card interest is no longer tax deductible. It was a huge financial advantage to go that route at the time but given the decreasing property values, it puts people further in the hole than they were.