The national foreclosure rate has climbed steadily throughout 2007. While most reports attribute the bulk of the foreclosures to ARM resets, the reality is that more than half of the borrowers who are defaulting are still in their first year of the loan.

Apparently, many of these borrowers bought under the assumption that prices would continue to skyrocket, probably had some “flippers” in this pool also.  Most of the (flippers) people buying property, fixing and selling have left this market.