Economists call rising delinquencies and foreclosures among prime borrowers the third wave foreclosures. The first two waves were do to housing speculation and subprime borrowers -- borrowers that had taken out some sort of short term, stated income, or adjustable rate mortgage with lower credit scores.
In the housing market, a lot of prime mortgages are becoming subprime as a new wave of foreclosures begins to hit. Mainstream homeowners -- those previously "safe" borrowers with sound credit who have conservative, fixed rate mortgages are getting into trouble at an alarming rate.
In the first quarter, the percentage of these borrowers who were behind on their mortgages or in foreclosure had doubled from a year earlier, to nearly 6%. For the first time in the housing crisis, these homeowners accounted for the largest share of new foreclosures.
With the current unemployment rates nationwide rising and California leading the way, it only stands to reason that we better know how to surf or swim, the wave is coming.