"One set of data that can help us is the value of adjustable rate mortgages that are due to be reset. Now an adjustable rate mortgage by its nature has an interest rate that changes. And one of the problems in the mortgage market has been that these interest rates in recent years have been going up," says Dr. Walden, a North Carolina Cooperative Extension specialist. "And so people perhaps who could afford those payments when the rate was lower found they couldn't afford those payments when the rate was higher. And that has contributed to higher foreclosures in the mortgage market.

"So we can look at the amount of adjustable rate mortgages that will have their interest rate reset as some gauge for whether the problem is going to get bigger or smaller," Walden continues. "And the numbers aren't very good. In 2007 it's estimated there will have been $260 billion worth of adjustable rate mortgages that will have their rate reset. In 2008 that will swell to $700 billion -- two and a half times larger.

"So we still have an issue here looming ahead, and I think this is one reason the Federal Reserve lowered short-term interest rates," Walden concludes, "because they want to clearly contain this potential problem."