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As we hear the national news, we always here about the foreclosures in America.  While foreclosures are up nationwide, a few states in our country are really skewing our national numbers.  According to the Mortgage Bankers Association, Arizona, California, Florida and Nevada make up 46% of all foreclosures in America.  To me that's astounding that 4 states out of 50 make up almost half of the foreclosures.  It also illustrates that although our market is far from perfect, we are in a much more fortunate situation.

Another stat provided by the Mortage Bankers Association that caught my eye is "Foreclosures by Loan Type".  Many of the foreclosures today are from sub-prime loans.  Sub-Prime loans were created by bankers in 2001 for people who have bad credit.  The bankers would charge them more interest in hopes of making more money on the loan and then package these loan with many normal loans and sell them to the secondary marketplace.  The only problem is that people with these loans mostly have bad credit for a reason, a problem paying their bills.  The following below illustrates this:

Product:        % of US Loans         % of US Foreclosures

Prime Fixed        65%                            21%

Prime ARM         14%                            23%

Subprime Fixed    6%                            13%

Subprime ARM     8%                            36%

FHA                   8%                             7%

Looking at these numbers, almost half of the foreclosures in the US are a direct result of these Sub-Prime loans.  These loans stopped being originated in 2007.  Once these banks get these sub-prime loans off the books, it will surely help them and the economy.