But it is this group’s dream houses are crumbling like sand castles. But mortgage representatives as well as the Federal Reserve Bank have rushed in with the assurance that these are merely teething troubles.

Center for Responsible Lending opines that what is happening is just the tip of the iceberg. 2.2 million borrowers in the sub-prime group have either lost or will lose their houses within few years.

It comes down to the harsh statistics of one out of every five sub-prime borrower in 2006-06 being affected. The figures remain unmatched in the history of modern mortgage.

Till yesterday Philadelphia and South Jersey had seen appreciation in the real estate market with a climb of about 70% to 80% in the last five years.

For sub-prime owners this was a boon because if they defaulted in their installments they could sell their property. It would not only clear their dues but also leave something extra for the future. But the reverse is taking place. Foreclosures are increasing and property rates are falling.

In Philadelphia appreciation of property is at 5% against 14% in 2004 and 2005. This will lead to about 17% house owners to forfeit their property through foreclosures. Similar is the pattern in Camden region where the appreciation rate has plummeted from 16% to 6%.

Till now the comfortable appreciation rate had made the regions an oasis safe from the depredations of foreclosure. People without funds just could not get an entry. But the sub-prime strategy played upon the feelings of those who coveted rich houses. They fell for the trap with disastrous consequences.

The mortgage rates are temptingly low at first but begin to climb after two years. It is as high as a 45% increase. To add insult to injury, sub-prime borrowers who improved their credit and wanted to move onto loans with better terms had to pay thousands in penalties. Never has such fraud taken place in the prime mortgage market.

Some players in the mortgage field are optimistic that the market will automatically correct itself. But words will not fill empty hopes. Strong legal action based on common sense is the need of the hour.

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According to recent studies on the San Diego real estate market, the foreclosure rate has risen 219% between July 2005 and July 2006. County records statistics show that in July 2005 there 345 properties in default in the city, whereas in July 2006 there were 756 homes in default.

As in other parts of the country, this trend is attributed to a number of causes including predatory lending practices, aggressively rising interest rates, and little or no money down adjustable interest rate loans. When homeowners get locked into loan deals that may at first seem to their benefit, such as ARMs, they often find that once the rates start rising, they are stuck with extremely expensive mortgage payments. On top of this, the decline in the demand for housing as well as property values has led to many citizens being unable to sell their homes to get out of their situation. Unfortunately, default on payment and subsequent foreclosure then becomes a very real possibility.

According to HUD and the Center for Responsible Lending, a national watchdog organization, predatory mortgage lending involves a wide array of abusive practices including excessive fees, abusive prepayment penalties, kickbacks to brokers, loan flipping, and unnecessary products and add-on fees. HUD warns that while many people believe these loan practices target only lower class homeowners, the incidence of predatory lending with middle and upper class homeowners is on a quick rise.

If you feel you have become the victim of predatory lending, be sure to visit the HUD website for information on who to contact for help.

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ForeclosureListings.com has a comprehensive, searchable database of foreclosures in areas like Columbus, Bronx, Derry, Missoula and in the whole country. Try to search foreclosures by state today! Mortgage Problem Affects San Diego