Many of the foreclosures out this way aren't from borrowers who are poor. For example, I personally know a contractor who is sitting on 3 homes that he built that he cannot sell now since he owes more than what he can sell them for. A lot of the homes on the Sacramento area that are in foreclosure, or close to, are 3000 sq ft plus homes where borrowers "bit off more than they could chew". Hardly poor IMO. They simply wanted a bigger, nicer home and were willing to get 0% down loans with no income qualifying in order to get into those homes. There are also some who've purchased 2nd homes to "flip"...They can no longer sell them and are stuck w/ 2-3 mortgages now.

I will concede that as commodity prices rise, more people are edging closer to that "edge" so to speak. For example, we have a new (3 years old) home that is 2600sq ft on acreage. It's beautiful, in a nice area, yet the home is now worth less than what the mortgage is. However, we're OK as we do not intend on selling for at least 10-15 years. We bought the house as our primary residence and it's comfortable. I am the only one currently working, and yes, we've had to do some "belt tightening"...But we're managing to pay the mortgage every month, pay the bills, and put food on the table. Our loan is fixed and we won't have any balloon payments coming due nor will we get a hike due to an interest rate hike.

We bought smartly...Many of the borrowers who are in foreclosure did not and overextended themselves due to their own greed...IMHO of course.