Number of homeowners who can’t afford payments escalates.

” You have declining prices,” he said. ” That’s what’s causing it. No equity, no options.” Ruff estimates the Valley could see from 6,000 to 7,000 foreclosures in the first three months of the year. And the inventory of pending foreclosures could rise to 25,000, up from today’s roughly 14,500.

I trust Tom Ruff’s take on the foreclosure market. He follows it closely. Last time I talked to him (a couple of months ago) he was thinking foreclosures would peak in the first quarter of 2008.

I do disagree with Misty on this, “The odds of a quick sale are slim with more than 55,000 homes on the market in the Valley.”

I just went into the MLS and found that of the single family detached homes sold (closed) in December, 34 percent were on the market 60 days or less. That means many homes are selling in a reasonable amount of time.

During the boom, anyone with a pulse could get a loan, said Warren Potter, senior loan officer with Indymac Bank.

” Obviously, that was a recipe for disaster,” Potter said.

People were taking out second mortgages on their homes like they were ATMs, he said.

Today, a once-aggressive lending industry is tightening guidelines on a near-daily basis. Borrowers need proof of income, a higher credit score and a larger down payment.

Subprime loans, designed for higher-risk borrowers, are now virtually gone, he said.

[Warren’s a great guy. If you are looking for a loan, you should consider giving Warren a shot at your business. Warren Potter, Indymac Bank, 480-694-6444.]

The article says the last batch of subprime loans should finish resetting by May or June.

If you are facing possible foreclosure, don’t miss this advice.

Borrowers are often afraid to call their lenders or are in denial, Sharga said.

” There are thousands and thousands of people who will probably lose their homes this year who didn’t have to,” he said.

Check out Misty’s real estate blog, “Misty Williams on Real Estate.” Her blog used to have a silly, completely forgettable name… which you’ve probably forgotten.