What goes up, must come down - way, way down.Valley foreclosures this year are expected to surge to the highest level in decades.

HOUSING: Local homeowners struggle to avoid foreclosure trend.
GOVERNMENT: Statewide budget shortfalls create local problems.
DEBTS: Consumer debt, late payments and bankruptcies are on the rise.
JOBS: Housing slump contributes to highest area jobless rate in years.

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Some 12,664 foreclosures were reported in 1990 - a year marked by exorbitant interest rates and an economy entrenched in a recession.

Foreclosures in 2008 will likely shatter that number in the first six months alone, said Tom Ruff of the research data firm Information Market.

"It can't be stopped," Ruff said.

More than 4,000 properties have already been foreclosed on this year, and nearly 10,000 others have entered the foreclosure process in that same time, the firm's data show.

Experts say a variety of factors have contributed to the dramatic climb.

For one, the Valley just has more homes now than in 1990.

The foreclosure woes also stem in part from the record-breaking home price appreciation during the boom.

The market is plummeting almost as rapidly as it rose during 2005's run-up in prices, Ruff said.

He added, though, that the rapid pace of new foreclosures isn't sustainable and the crisis may reach its peak this year. More than 16,600 foreclosures are pending across the Valley, some still from last year.

"This is going to be the bad year," he said.

The higher the peak, the lower the valley, said Carolyn Drake, past president of the Arizona Association of Mortgage Brokers.

Lenders put people, some who shouldn't have even owned a home, into risky products, such as option adjustable-rate mortgages, or ARMs, Drake said. With an option ARM, borrowers can unwittingly increase their principal balance each month by choosing a minimum payment that doesn't cover the interest due.

"It takes pretty savvy people to understand them," she said. "They're complicated, but they were being advertised as if they were the greatest thing since sliced bread."

Drake said she recently had a homeowner come to her who didn't realize he had an option ARM and had inadvertently tacked $52,000 onto the back of his loan in 22 months.

Subprime loans, designed for borrowers with iffy credit, were not intended to be long-term solutions, she said. People thought Arizona home values would always rise, so they could refinance out of risky loans, Drake added.

"We're paying for our sins," she said.

Much of the foreclosure problem also lies with amateur investors who tried to capitalize on the housing frenzy and are now defaulting, said Jill Hoogendyk, president-elect of the brokers association.

Many used 100 percent financing, not putting any money into the properties, and are walking away, Hoogendyk said.

For some distressed owners who are letting the banks take back their houses, "it's a question of do I keep making my payments on this, or do I feed my children," she said.

But, Hoogendyk said, lenders are more willing to work with people now than at any other point in the 25 years she's been in the business, though it's case by case. She added that she believes the market may stabilize in 2009.

The biggest hurdle blocking a possible recovery is the struggling economy, said Jay Butler, head of realty studies at Arizona State University.

People are afraid their hours will get cut or they won't get their annual bonuses, Butler said. Meanwhile, the price of gasoline and other necessities is going up. Any recovery will depend on a return of consumer confidence, Butler said.

And in periods of uncertainty, "the classic thing to do is not do anything," he said.