It is a common scenario all over the country. If you have turned on the evening news in the past year, you know that real estate is not the happy story it once was.
A nutshell summary of what's happened: A lot of people bought homes using a subprime mortgage (loosely defined as a mortgage with an interest rate that wasn't a the government standard) with a monthly payment they thought they could afford (often without putting any money down). But they got into trouble when adjustable rates pushed their montly payments up hundreds or thousands of dollars. As payments went up, property values were falling, so owners could no longer recoup a real estate investment by refinancing or selling. this past March, RealtyTrac, an online foreclosure marketplace, reported that more than 230,000 homes were in foreclosure. People were stating income that wasn't there and the mortgage brokers were inflating beyond even that. People were allowed to buy houses they could not afford. They exaggerated their income.
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