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According to Realtytrac, a huge online marketer of foreclosed homes, 77 out of the nations 100 largest metropolitan areas have seen an increase in foreclosed homes over the past 3 months as compared to the previous 3. The states taking the brunt of the damage were Ohio, Florida, and California.

One of the key factors to the high levels of foreclosed homes is the fact that there are over 7.2 million homes with subprime lending, of which 14% are considered in default, this according to the Center for Responsible Lending. Their prediction is that one of every five loans awarded in 2005 and 2006 will end up in foreclosure. That is a hugely dissatisfying number.

What would lead to the demise of the market you ask? Ask any economist and they’ll tell you its their fault. In all actuality, the main reason is people beleiving they deserve what others have worked for for many many years. If you have to have some round about way to finance a home, more than likely you will fall into this category. We should not live beyond our means. If a house payment is not acheivable with a conventional 15 or 30 year term, then we need to reconsider what we are capable of purchasing or if purchasing is even the right idea at the current moment.

In all reality, subprime mortgages are there to help people fail. If you tell someone you have a subprime mortgage, they will likely relate the thought to home foreclosure. As made obvious by recent history, subprime loans = foreclosure.

Here are some keys to keeping yourself out of forclosure

• Don’t buy a home larger than you need or can afford for that matter.
• Don’t get caught up in the all the “extras” of owning a house. Live without cable or internet if needs be, make ends meet.
• If you do have a subprime loan, try to save enough money to refinance while rates are still low.
• Seek financial advice from your lender or bank.
• Don’t rely on future income to pay today’s debts. If you can’t afford it now, it is likely you won’t afford it then.
• Keep your credit card and other debts to a minimum. If you pay off a car early you have that much extra to put towards your house.

Most importantly, use some common sense. If it smells like a rotten egg, more than likely it is. If you never feel quite comfortable signing your life away in mortgage papers, then the decision should probably be made to not sign. Remember, its just like a marriage, just because you have given earnest money (a ring) and gone through all the hoops (liscensing), you aren’t husband and wife until you say I do, or in this case, sign the final dotted line.

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