From the book “Restoring Financial Stability: How to Repair a Failed System”. Section VI: The Bailout
The damage caused by the collapse of the housing and housing finance sectors of the economy is spreading at an alarming rate. Foreclosure activity jumped 81 percent in 2008, with more than 3 million foreclosure filings on 2.3 million properties. The ever increasing number of households who are upside down on their mortgages poses a growing threat to the financial system and the economy as the actual losses, and the uncertainty about their extent, pass through the financial system to the holders of the underlying mortgages and mortgage-backed securities.