Las Vegas and Florida, on the other hand, are seeing foreclosures as a result of speculative markets gone wrong, Sharga says.

"You had a lot of people buying speculatively without knowing what they were doing," he says. "Investors were buying homes at full price hoping to get their money back after a quick resale. But when the market flattened, those people got in trouble."

One state in the Deep South found itself in another unique situation.

"In Georgia, we saw an unusual amount of mortgage fraud," he says. "That is where rings of people, including appraisers and agents, artificially inflate a house and get it sold. Then when the new homeowners tried refinancing, they found their home wasn't worth what they thought it was."

And while it may seem logical that other Gulf Coast communities might be suffering through foreclosures caused by hurricane-related hardships, Mississippi and Louisiana actually posted modest foreclosure numbers in 2006.

Sharga attributes that lack of foreclosures to state-imposed moratoriums forbidding foreclosures in the immediate aftermath of Hurricane Katrina, coupled with a surprising willingness of banks to work out troubles rather than take back homes.

"Uncertainty really motivated those banks to not call those mortgages," Sharga says. "The lenders just weren't in a hurry to take possession of a home that might or might not now be worthless." 

Sharga expects to see the next wave of foreclosures in areas such as the Midwest where automakers and other employers are laying off large swaths of workers.

"We are watching closely in places like the Rust Belt because of layoffs and layoff concerns," he says. "What we expect we might see is an 'Am I next?' syndrome, where buyers stay on the sideline because they aren't sure if their jobs are secure."

The indicator that will most likely signal an end to the foreclosure storm is a decreased number of homes for sale on the market. 

"As you read stories about the inventory of homes being consumed, it will have a positive effect on foreclosures," Sharga says. "As inventory comes down, it will reduce the amount of time it takes to sell the house, and that will help keep properties out of the foreclosure process."

But even with such dire statistics, Sharga stresses that the foreclosure number merely shows total filings, and not necessarily total number of homes banks have taken back from homeowners. That's because oftentimes when a bank begins the foreclosure process and sends a home to auction, bargain hunters snatch up the newly discounted home.

"That's what we are seeing in California," Sharga says. "They have almost no bank-owed properties despite relatively high foreclosure numbers."

Sharga suspects people who were forced out of the market as prices started to climb are now jumping at the house that they were looking at, but are now able to buy at a discount.

Regardless of what causes the foreclosure, when people snatch up properties at a discount, it has the potential to depress the rest of the housing market. As that pushes prices down, other homeowners may also find themselves in a tough financial situation with few good options available.

Michael Giusti is a freelance writer based in New Orleans.