New Foreclosures Hit Record

The rate of mortgage loans entering the foreclosure process was the highest in history during the second quarter, the Mortgage Bankers Association said Thursday.

The foreclosures, which are tied to the resetting of trillions of dollars in adjustable rate mortgages, were the worst in California, Florida, Nevada. and Arizona, where the housing boom was hottest but has now turned to a bust.

These states have some of highest levels of ARMs, and as housing prices drop, many homeowners are facing negative equity when trying to refinance or sell the home. ...