Maria Lopez says she got into trouble when her $3,000 mortgage payments jumped nearly a thousand dollars. After six months of missed payments, the lender is ready to take back her house.
"My situation right now is that I am going to foreclosure and I don't want to go to foreclosure. I want to negotiate with the bank because I want to make my payments," says Lopez.
Lopez is certainly not alone.
The Mortgage Bankers Association says as of June, a record 9.2 percent of homeowners with a mortgage are either behind in their payments or in foreclosure. That's up from 8.8 percent earlier this year and up dramatically from the same time last year.
Realtor Jim Matzen says with more foreclosed properties on the market, banks are also getting more aggressive with their pricing.
"Maybe four months ago they were pricing it a little high and then waiting for the price to be driven down by the market. Now they are trying to be at or below market price so they can sell quickly and get rid of their inventory," says Matzen.
The strategy has a spillover effect as the foreclosure market drags down property values for all sellers. A counselor for Acorn Housing says there is little hope Maria Lopez can avoid becoming the next foreclosure statistic and indeed most industry analysts say the situation still hasn't hit bottom.
"We know because we're helping several lenders with their foreclosures and they're telling us more is on the way," says Don Campagna, a Prospect Mortgage loan officer.
There is some good news. Campagna and other lenders say this is an excellent buying opportunity for many people. In fact, government-backed FHA loans are helping some people get into foreclosed homes with as little as 3 percent down.
It's also important to note that just having an adjustable mortgage isn't necessarily a warning sign. Only about 2.5 percent of those who put enough money down to get a prime adjustable rate mortgage went into foreclosure, while nearly 10 percent of homeowners with subprime arms started foreclosure.