Check this BusinessWeek 'Map of Misery<http://images.businessweek.com/gen/map_of_misery.jpg>' in California with its huge amount of Option ARM mortgages (these give the ability to pay varying amounts each month, often tiny, until a trigger amount owed is reached, then it resets at much higher mandatory payments.) California homeowners with these are going to get clobbered.
We sold our home in Los Angeles in Jan 2007. There were few foreclosures in that area then. Now there are a huge number and our realtor there said in August if he was to put the house on the market then it would be at 15-20% less. It was in the burbs, mostly Anglo, and solidly middle class, not poor at all.
There's foreclosures in Santa Monica now, people with multi-million dollar homes had variable rate mortgages too.
Subprime started with the poor, and Citigroup built their empire on it. Then came the packaging on the mortgages into securities, CDOs, SIVs, etc. That's where the big money was. The actual mortgage became, I think, almost irrelevant to the process except as the building blocks.
