An all too familiar site continues on courthouse steps across the state of Virginia as homes in foreclosure continue to go on the auction block. Earlier this month it was reported that foreclosure filings in Virginia have increased more then 300 percent this past July over the same time period of last year.

The report stated that 1,959 foreclosure filings were reported in Virginia during July alone. According to RealtyTrac the state of Virginia is currently averaging one in every 1,621 households, is in foreclosure. When compared to other states Virginia came in 21st place.

Over the past several months the number of cash-strapped homeowners seeking to stop foreclosure on their Virginia homes has increased sharply. During the red-hot real estate market 2004 and 2005, many Virginians eagerly entered into adjustable-rate mortgages to buy or refinance a home. The trouble started once the interest rates on ARM loans adjusted upwards. This combined with sharply increasing property taxes created a burden on many borrowers they had unanticipated. The result is that many Virginia homeowners were unable to meet their greatly increased monthly mortgage payments.

Many housing and financial experts feel the rising trend in foreclosures in Virginia, as well as nationwide, will continue as adjustable rate mortgages show no signs of adjusting down in the near future.

A question frequently asked is how come this was allowed to happen. There are many facts, as well as a few hair-brained conspiracy theories, attempting to pinpoint exactly what happened. Perhaps a simple explanation is best to describe what most agree transpired to bring on the current crisis.

Historically when a homeowner had to foreclosure on their home the primary reasons was job loss, unexpected medical expenses, or divorce just to name a few. A borrower typically relied on a 30-year, fixed rate mortgage and they had to have good credit to even apply.

Early in the 2000's things started to change. As home prices increased and homeowners with marginal credit were unable to obtain a fixed rate loan some lenders responded with an array of alternative mortgage products. These included adjustable-rate mortgages with flexible payment options and interest-only loans.

Short-sighted individuals bent on homeownership eagerly bought into these new offers and simply failed to plan for the higher monthly payments that would begin once the initial rates on their adjustable-rate mortgages reset.

Adding to this problem is the issue of homeowners mining the newly found equity in their homes. Many took out second mortgages or lines of credit against their equity to eliminate credit card debt. While noble in gesture few were able to curb their ingrained spending habits and promptly maxed out their credit cards again. Without the extra means to cover the added expense of the credit card bills homeowners found themselves in financial hot water with no means to bail themselves out. They had few alternatives available so they allowed their homes to slip into foreclosure.