Could Foreclosures possibly affect more than 2 million homeowners?

The number of homeowners filing for home foreclosure in the US rose sharply 58% from January to June, and might be more than 2 million in 2007 as the housing market continues to suffer. In the first half of the year, foreclosure filings rose to 925,986 as many borrowers were overstretched and could not afford rising interest rates and were facing falling home values. This week the Federal Reserve stated that the falling housing market is the largest risk to the US economy and economic growth. At one foreclosure filing for every 134 households, foreclosure filings were up more than 30%  since July-December 2006. According a Realty Trac executive, even though there was a slight drop in the number of foreclosure ilings in June, the number of foreclosure filings is showing no sign of falling. Realty Trac states that if the current pace of foreclosures continues throughout the year, foreclosure filings will be more than 2 million this year alone-up more than 65% from last year. In the first half of this year, California had more foreclosure filings than any other state, with Florida ranking second. Nevada has the highest number of actual foreclosures (the house is sold at auction, the owners actually lost the deed to their house), with one foreclosure for every 40 homes. Problems in these states are worse than most others as speculations on how high the housing market could go caused home prices to rise higher than ever before. Highly affluent states such as California, Florida, Nevada and even states such as Arizona are struggling with their foreclosures rates, which is a change from past years when more industrial-centered states suffered from high foreclosures rates when plants closed and there were massive job losses. Many homeowners are facing foreclosure after trying to “flip” houses-buy the houses for less than market value, do some renovations and then sell it for profit. However, when home prices fell, flippers were stuck with homes that they could not sell. In addition when home prices were on the rise, homeowners were able to tap into their home equity, but now that home prices have fallen, many homeowners who had depended on the availability of this option and struggling to avoid foreclosure.  Many buyers also did not qualify for a conventional home loan, and many took out loans with interest rates that started low but rose very quickly and can no longer afford the payments. While before these home owners might have taken out home equity loans, now they are unable to and are facing foreclosure.