Realtor coaching clients be ready for what you are about to read…this is actually a historical event. 9% of all homeowners are behind in a mortgage payment.

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When you have the skills and the service mindset…..you will find sellers (and buyers) lining up to work with you. Don’t be afraid of this market. Embrace this market for what it is…an opportunity. Start by learning exactly how to take REO Listings. Download our Free 7 Part Agent REO Secrets Guide Book Now.

This is part of an Associated Press article that will be the headlines of all the major newspapers this weekend…

More than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis worsened, the Mortgage Bankers Association said Friday.

All indications are that the number of homeowners missing a mortgage payment will only increase over the next few quarters. This means that millions of homeowners will have to hire a Realtor who knows how to successfully close a short sale listing. Learn how-to now. Download the free 7 Part Agent Short Sale Secrets Crash Course. Instant Free Download Now.

But the source of trouble in the mortgage market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.

“The problem that policymakers and Wall Street once assured us was ‘contained’ to subprime mortgages has proven to be anything but,” Mike Larson, a real estate analyst with Weiss Research, said in a research note.

The trouble is concentrated in a handful of states, the worst being California and Florida, which had some of the riskiest lending practices and rampant speculation.

“We are unlikely to see a national turnaround until we see a turnaround in the two largest states,” with the most outstanding home loans, said Jay Brinkmann, the association’s chief economist.

New foreclosures rose dramatically in eight states: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio, but actually declined in Texas, Massachusetts and Maryland.

Almost 500,000 homeowners, or about 1 percent, entered the foreclosure process in the second quarter.

But for the first time since the mortgage crisis started, delinquencies on subprime adjustable-rate loans declined. While more than one out of every five homeowners with a subprime ARM is still in default, that portion dipped 1 percentage point from the first quarter to 21 percent.

What’s driving the delinquency rate up now is the number of homeowners with risky, adjustable-rate prime loans made with little or no proof of the borrowers’ income or assets.

More than one out of 10 borrowers with a prime adjustable-rate loan is now delinquent or in foreclosure. That portion, 11.3 percent, was up from 9.7 percent in the first quarter and is expected to continue to rise as more homeowners see their monthly payments spike.

Many of these loans allowed the borrower to pay only the interest on the loan for a fixed period. Others gave the borrower the option to “pick-a-payment,” adding any unpaid interest to the principal balance.

Defaults on these mortgages, which earned the nickname “liar loans,” are costing Fannie Mae and Freddie Mac billions of dollars. The Treasury Department has even pledged to bailout the mortgage finance companies if necessary.

With home prices plummeting, particularly in California, Nevada, Arizona and Florida, many borrowers with these exotic loans now owe more on their home than it is worth.

And nearly half of these pay-option loans are expected to reset to higher monthly payments by the end of 2010, Fitch said.

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