Nearly 12 percent of all American home owners with a mortgage–a record 5.4 million–were one month late or actually in foreclosure at the end of 2008, according to data from the Mortgage Bankers Association. Among home owners with subprime adjustable-rate mortgages, 48 percent are behind in their payments. The increase in foreclosures is being fueled by rising unemployment.

While numbers of foreclosures are declining in states that were initially hardest hit by the crisis, the situation is getting worse in Texas and New York City, places that appeared early on to be immune from the problem. Meanwhile, a report by RealtyTrac shows that most of the 1.5 million foreclosures in 2008 were focused in  35 counties. These locales represent about 1 percent of all the counties and are clustered in Michigan, Ohio, Southern California, Nevada, Arizona, South Florida and Washington, D.C. One quarter of last year’s foreclosures happened in just eight counties in Arizona, California, Florida and Nevada, places where the market boomed and prices skyrocketed. About 20 percent of U.S. households live in these key counties, but they account for more than 50 percent of the foreclosures last year. In more than 650 other counties nationwide – about 20 percent – foreclosures have actually dropped since 2006.