The reason for the foreclosures is mainly due to extended unemployment rather than onerous subprime mortgages. Many of the defaults are with prime fixed-rate mortgages by people with good credit. Some of them may well be underwater on the home and are simply choosing to walk away.
New Observations forecasts that one in ten homes will foreclose in the next two years, adding a huge inventory onto an already staggering market. They add that once the homeowner misses two payments that the cure-rate is practically zero and the house is a goner.
There’s a lot of pain out there now. As tthe banksters continue to make billions from it all, propped up by a compliant government.