More and more Wisconsinites are losing their homes to foreclosure. One data service in Milwaukee says filings are up 37% since last year. Eau Claire County Sheriff Ron Cramer says foreclosure rates have been pretty steady for the past two years, and tomorrow alone there are nine scheduled sheriff sales. We tried to find some answers on why this is.

Charter Bank President and CEO Dean Olson says the main reason there are so many foreclosures is because of ARMs or adjustable rate mortgages.

Olson says "in the federal reserve, raise interest rates 4 ¼% so unfortunately loan products that were probably affordable back then with no rate increases have become more and more unaffordable."

ARMs start with a very low interest rate but go up as the years go by.

UW-Eau Claire Accounting and Finance Professor Tom Mihajlov says "if the deal seems to good to be true it usually is."

Mihajlov says subprime mortgages have forced some homeowners into foreclosure, but the companies that offer them are most likely not local.

Mihajlov says "they'll offer almost anything because they are selling something and they're getting fee incomes and that's all they're interested in."

He says many people who get subprime mortgages don't account for the rate increase. We talked to the former owner of a home that was foreclosed on. He calls them “predatory loans” because the companies know homeowners can't afford it.

Olson says these companies often offer 100% financing but sell the mortgage right away for another company to handle, "but two things happened. The market got over built, the real estate value stopped going up and rates went up so fast."

Mihajlov says the best advice is to deal with a local bank. "The reason a company lends you or someone else money to buy a home is an investment and foreclosures stop that return."

Both Olson and Mihajlov say the best advice, is to know what you can afford and understand your interest rate now, and what could happen to it in the future.