Paying your mortgage

Problems ahead for the housing sector:

Historically, borrowers who run into trouble paying their mortgage tend to do so within the first three to five years of the loan period.

Currently, more than half of the nation's $9.2 trillion in outstanding residential mortgage and home equity loans are less than three years old, said Doug Duncan, chief economist for the Mortgage Bankers Association.

Another potential trouble spot: About 24 percent of all home loans are adjustable, which can be risky if borrowers end up paying far more than they bargained for as the Federal Reserve hikes interest rates.

''Adjustable-rate mortgages always have a slightly higher delinquency rate than fixed-rate mortgages,'' Duncan said.

California, where the median price of a home hit $468,000 in April, leads the nation in the percentage of homes purchased with adjustable-rate mortgages.

Bottom feeders gather outside the courthouse every day for the latest real estate auction. Some are professional investors; others come to ply skills gleaned at get-rich-quick seminars.

All of them are trying to scoop up homes that belonged to others who died, divorced, were thrust into bankruptcy or fell too far behind on their mortgage payments and failed to sell.

Many homes that do end up in court are saddled with more than one mortgage and have little or no equity -- so the investors take a pass.

''In the last six months or so, it has been like this,'' said James Lee, who has mined trustee auctions for investment property for 15 years.

When home price increases were stronger, investors could buy a property and sell it a few months later for a hefty profit.

''Now you're getting into the market where there's plenty to buy, but there's nowhere to sell it,''

Anybody been to one of these auctions lately?