...These visuals (download here) from Ben Bernanke's "heat maps" show a striking picture of some of the hardest hit areas for mortgage delinquencies. I pulled out just one of those maps for display below, showing the change in mortgage delinquency from 2004 to 2007.  What particularly jumps out is that almost all of California and Florida are caked in red.  Others hard hit: Michigan, Maine, Connecticut, and Rhode Island.

The graphic above sort of jibes with the one below which shows the change in home prices from 2006 to 2007 .  It visually highlights the effect of declining home prices on increased risk of foreclosure.

But here's a possible up-side: one of the managing partners, Cyril Moulle-Berteaux, at a New York hedge fund firm makes a compelling case that we may be looking at the bottom of the market. (Article.) 

It's a compelling read and makes the case that we're again approaching reasonable debt ratios for first time- and average-home buyers.  In the zoom-boom days, it got to a point where housing was consuming as much as 37% of income, now it's coming back down towards 30%.  Mr. Moulle-Berteaux's expectations are for the pace of inventory reductions to increase through the rest of this year with prices stabilizing in 2009.  But while price declines will continue, he believes the 30% decline bandied about by pundits is misguided because of a simplistic analysis that simply looks at a comparison of current house prices to their 40-year average while overlooking the importance of share-of-wallet for mortgage payments as a key determiner for home buyers. More here.