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A recent list of year-end mortgage foreclosure rates in 100 top metropolitan areas drew a lot of attention. Released by RealtyTrac, a company that compiles data on home foreclosures, the list showed the number of foreclosure filings in each metro area, the percentage of homes being foreclosed and the percentage change from the previous year.

Though the report had some dismal news -- such as the nearly 4.9% foreclosure rate in the Stockton, Calif., area -- a close look at the data also provides some reassuring information. It tells me, for instance, that the foreclosure crisis is a regional problem, not a systemic one. It could become a systemic problem, of course, but we're a long way from that now.

This news will disappoint the gloom-and-doom crew and all those seeking the excitement of financial upheaval. But it may be time to temper our worry and take a closer look at some of the year-over-year foreclosure statistics:

• Though the national rate of foreclosure increased by a whopping 79% between December 2006 and December 2007, the rate was still only 1.033%. Because about 30% of all homes are owned mortgage-free, this means that for all the noise about a crisis, only seven-tenths of 1% of all homes were in foreclosure.

• In the top 100 housing markets, the average foreclosure rate was somewhat higher -- 1.38% -- and it was up 78% over the previous year. But if you rank-ordered the list of the top 100 areas, only 34 had foreclosure rates above the group average. Fifty-one areas had rates of 1% or less.

• Foreclosure rates actually fell in 14 of the 100 areas. More important, many of the areas with the highest increases in foreclosure rates were rising off rates that were tiny. The Bethesda, Md., area, to offer the most extreme case, saw foreclosures rise 1,288% -- to a rate of 0.682%. In other words, foreclosures there were virtually nonexistent the year before. Today they are still well below the national average. The same can be said for the Albany, N.Y., area (up 638% to 0.25%), the Baltimore area (up 544% to 0.73%) and the Providence, R.I., area (up 354% to 0.41%).

Another pattern emerges if you cross the foreclosure rates with the Office of Federal Housing Enterprise Oversight (OFHEO) index of home prices. It shows that the top 10 foreclosure areas in America are areas of extreme price change -- changes far from the national average of 46.92% over the past five years. (See the table below.)

Seven of the top 10 foreclosure areas had experienced major price spikes in the past five years. Three of the top 10 foreclosure areas had experienced price increases that were dramatically lower than the national average. That pattern continues when you examine the top 25 foreclosure areas.

Another pattern emerges if you cross the foreclosure rates with the Office of Federal Housing Enterprise Oversight (OFHEO) index of home prices. It shows that the top 10 foreclosure areas in America are areas of extreme price change -- changes far from the national average of 46.92% over the past five years. (See the table below.)

Seven of the top 10 foreclosure areas had experienced major price spikes in the past five years. Three of the top 10 foreclosure areas had experienced price increases that were dramatically lower than the national average. That pattern continues when you examine the top 25 foreclosure areas.

A tale of two extremes:

Metro area	Foreclosure rate, December 2007	Year-over-year increase of foreclosures	5-year home-appreciation rate
Detroit/Livonia/Dearborn, Mich.	4.92%	68.15%	-0.92%
Stockton, Calif.	4.87%	271.3%	65.07%
Las Vegas/Paradise, Nev.	4.23%	169.11%	88.33%
Riverside/San Bernardino, Calif.	3.83%	186.14%	107.80%
Sacramento, Calif.	3.12%	272.54%	56.9%
Cleveland/Lorain/Elyria/Mentor, Ohio	2.97%	112.43%	9.36%
Bakersfield, Calif.	2.96%	244.82%	113.82%
Miami	2.72%	106.13%	114.98%
Denver/Aurora, Colo.	2.64%	27.19%	10.83%
Fort Lauderdale, Fla.	2.63%	110.05%	94.29%
National average	1.03%	79.21%	46.92%
Average of top 100 metro areas	1.38%	78.23%	Not available
Sources: RealtyTrac, OFHEO

The seven areas with the top price appreciation for the past five years averaged a stunning 91.6% increase, nearly double the national average. The national average, in turn, was about triple the inflation rate for the period.

Small wonder the foreclosure rate is booming as well. Anyone who bought in the past few years with a 5% or 10% down payment has a good chance of being upside down as froth comes off the market. In those areas the problem is about irrational price spikes and the hazards they bring to homeownership.

Some would call this "a Cadillac problem" -- a great problem to have, like having more boats than you have water-skiers. Though 5% of the homeowners may be losing their homes, most of the other 95% probably feel significantly richer.

How much richer? Try this. Suppose you paid three times your income for a house and it nearly doubled in value over five years. What does that mean? It means your net worth grew by nearly three years of income. Try achieving that with your 401(k) plan. Even if you bought halfway through the surge, your gain is likely to be well more than one year of income. However you cut it, the change compares quite favorably with working and saving.

Do your homework and you might be able to make an aggressively low offer that a seller will accept -- or at least counter.

Home sellers are not automatically turning up their noses at offers that come in far below their asking prices these days as prices stagnate and the inventory of homes for sale remains elevated in many markets.

But buyers who ask for deep discounts still risk offending sellers to the point where they ruin any chance at making a deal. So before making an aggressive offer, some homework is in order. Further, buyers need to effectively explain why the price of a home should be lower.

There's a danger of them taking it too personally, When you're making the offer, if you justify that offer with outside data, then it's much less likely to be perceived as being an insult or (to the buyer) not as serious.

Here are some guidelines on how and when to make an aggressive offer for a home:

Certain sellers are going to be more willing than others to negotiate a low offer, and there are several clues that might indicate more leeway on price. For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal.

And certainly if the property has been on the market for a long time, sellers will be interested in entertaining any offers.  The nuggets of information a buyer's agent gets can be clues as to what kind of offers they'll consider. Overall local market conditions also play a role. The housing market in many parts of the country are sluggish, and many homes have been on the market for a year or more.

When putting together an aggressive offer, create a cover letter explaining exactly where that number came from.

In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, a good buyers agent can assist in this.

If just the relative values of the houses that sold, were looked at in many markets, you might end up paying too much for that house because the values will continue to fall in some areas. If there is two years' worth of inventory, in any specific market, you should be buying 5%, potentially 10% less than what houses have sold for in the past year in the neighborhood.

Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd. That way, they can detail what they like about the house but express their fear of future dropping values.

That's still not to say the seller will respond positively.

The difficulty we're having in the market right now is sale prices are not dropping much, things are just staying on the market longer. Buyers read about how terrible the market is sellers don't want to budge because they're reading that prices aren't falling.

A word of warning to buyers making very low offers, is that the seller might refuse to negotiate. On a super-aggressive offer, there's maybe a one-in-ten chance there will be a positive response.

Still, there's that potential for a seller to counteroffer, especially if there hasn't been many other bids. Sellers are beginning to think of a low offer, not as an insult but as a sign of interest.

It begins the dialogue regarding the purchase of a house. Also, not all hope is lost even if a seller doesn't bite immediately.

Sometimes after time elapses, the seller comes around and decides to negotiate. Or new information -- such as the sale of a comparable home at a lower price -- can nudge a seller to give an offer, even an aggressive one, a second look and open the negotiation process.

Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.

Mortgage insurers, whose backing is required for borrowers who can’t afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation’s ZIP codes where they refuse to insure some home loans.

That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J. and condominiums in Las Vegas.

The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada — which have seen the highest foreclosure rates and the worst price declines — are blackballed on some mortgage insurers’ lists.

Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.

For new home buyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.

Luckily for all of us in Colorado, MK Mortgage has the ability to lend to those who may not have 20% down. MK Mortgage Has built exceptional relationships with several lenders. These lenders are willing to work with a select number of brokers, nationally, to lend more money and provide fantastic financing opportunities that do not require mortgage insurance or the risks of adjustable loans.

We’re in the midst of an epic, broad, sweeping change in the mortgage industry, But this does not mean the end to several good opportunities, if you know who to talk to when looking for a mortgage.

5 REASONS TO BUY

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much, although many experts agree that we are near if not at the bottom of the housing crisis in many parts of the country.  We are especially lucky in Colorado, as for most of the state values have held steady or even shown small gains.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price, especially considering that economic experts forsee the housing issues turning around by the end of 2008.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.

4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.  As you have probably heard before, this is a buyers market.  As such you can negotiate much better terms for your new hom than you could have just a couple of years ago!

5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.