Has the housing bubble found its pin?

"After recording more than 9,000 foreclosures in 2005, Wayne County [Michigan] ended January with 3,364 homes in active foreclosure, the highest of any county in the nation by more than 1,000," reported the Detroit News. "Katherine Ben-Ami ... an attorney for the Wayne County Sheriff's Office ... supervised the auction of 379 foreclosed Wayne County homes in 35 minutes" on one recent Wednesday morning. During one one-minute stretch, Ben-Ami foreclosed on 11 homes.

The Wayne County housing disaster reflects the ongoing demise of General Motors, once a pillar of the U.S. industrial economy. Unemployment and cutbacks in overtime have left many homeowners unable to meet their mortgage payments, particularly those who took out exotic loans "or siphoned all the equity out of their property to pay off debts or get cash," notes the paper. "My monthly payment went from $500 to $2,200 because of the negative escrow account," explained one General Motors worker who lost his home in a mortgage default.

"Many people are biting off more than they can chew," explains Bettina Pearch of Greenpath Debt Solutions in Allen Park, Michigan. "I see a lot of people who are living for the mortgage. There's a lot of creative financing out there that is not really in the client's best interest." The radiating effects of the foreclosures are leading to a regional depression.

Wayne County presents a microcosm of economic conditions that exist nationwide, albeit in a concentrated form. Noted the Bloomberg News service on April 25: "Mortgages entering foreclosure jumped 72 percent during the first quarter from a year earlier, as higher interest rates increased monthly payments and strained the budgets of homeowners with adjustable-rate loans." This reflects not only the fact that adjustable-rate mortgages are starting to balloon, but also "the rising costs of living," particularly energy, noted the April 28 Orlando Sentinel.