Mortgage defaults spreading - and picking up speed

Talk to almost any Realtor these days you'll find that a large portion of the home transactions they handle involve short sales or foreclosure properties.

And I'm talking LARGE portion.

Tom Adams, who owns Century 21 Adams & Barnes in Glendora and Monrovia, says short sales and foreclosures make up about 70 percent of his business - quite an uptick from 30 percent to 35 percent just six months ago, he said.

"It's what's driving the bus," Adams said.

Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, has experienced similar trends.

Last month, Rodriguez noted that foreclosure properties accounted for about 50 percent of her company's housing transactions, up from 30 percent in August.

On Thursday, the Mortgage Bankers Association reported that 48 percent of the nation's homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure.

And perhaps more alarming, a record 5.4 million American homeowners with a mortgage of any kind - nearly 12 percent - were at least one month late or in foreclosure at the end of last year.

"The 48 percent figure doesn't surprise me because that's 48 percent of the people who got into dumb loans who are in trouble," Adams said. "But that second number is more alarming because it's reaching across into areas of the nation where people didn't think this would happen."

And that's scary.

I feel for the people who might have lost their job or experienced other significant circumstances that led to their home going into foreclosure. And I even have sympathy for some of the ones who just didn't understand the terms of their loan.

But there are scores of others who knew up front that they shouldn't be buying the home they are now struggling to keep. I don't have a lot of pity for them because you and I as taxpayers are essentially bailing them out.

Many of these homes are being snapped up by first-time buyers or others who qualify for the loan and can prove they'll be able to make the payments. But many other foreclosed properties are just sitting there ... morphing into something like this.