From tomorrow’s Providence Journal:

Nationally, the spike in delinquencies and foreclosures, experts say, is fallout from the downturn in the real estate market. For years, rising house prices have far outpaced income growth — making owning a home ever more unaffordable.

“New England looks like the roughest area of the country after the Midwest,” said Karl E. “Chip” Case, a housing economist at Wellesley College. “It’s expensive up here, [home] prices are high, there are a lot of exotic mortgages and people are stretching themselves.”

The article profiles a homeowner who got into financial trouble by getting into an 80/20 mortgage. The larger portion fo the loan, 80% is based on one rate, and theremaining 20% is based on a higher rate. In my experience one, or both will be variable rates (in other words, the payments will increase or decrease depending on interest rates and terms). In this homeowner’s case, the 80% mortgage let them pay only interest during the first two years.

Due to many other circumstances (click the link above to read about them) the homeowners are now in Chapter 13. If things work out, they may be able to keep their home.