The Mortgage Bankers Association released its widely anticipated foreclosure report today, and boy, was it ugly.

I compared the foreclosure data with last week's delinquencies data, provided by the Federal Reserve, to show how delinquencies have turned into foreclosures:

Year

Foreclosure Rate

Loan Delinquencies

2002

0.45%

2.12%

2003

0.41%

1.83%

2004

0.43%

1.56%

2005

0.41%

1.55%

2006

0.46%

1.73%

2007

0.71%

2.53%

2008 (Through Q2)

1.09%

4.33%

*Sources: Mortgage Bankers Association, Federal Reserve.

In the second quarter, foreclosures set new records (anyone else feel like we're uncomfortably used to saying stuff like that?) Foreclosure rates on prime fixed mortgages stood at 0.34%, while adjustable-rate prime mortgage foreclosures came in at 1.82%. Adjustable-rate subprime foreclosures stand at a massive 6.63%. For big pushers of so-called ARMs like Wachovia (NYSE:WB) and Washington Mutual (NYSE:WM), that likely means the barrage of write-offs and sickening earnings reports is nowhere near over.

Another interesting snippet from the report: "The increases in foreclosures in California and Florida overwhelmed improvements in states like Texas, Massachusetts, and Maryland ... California and Florida alone accounted for 39% of all of the foreclosures started in the country during the second quarter and 73% of the increase in foreclosures between the first and second quarters."

Whoa. Banks with heavy exposure to those soured markets include Wells Fargo (NYSE:WFC) and SunTrust (NYSE:STI). Ironically, those two are respectively one of the strongest banks and a rumored takeover target for JPMorgan Chase's (NYSE:JPM) expected bottom-fishing campaign. Go figure.  

Where do we go from here? Many economists and market pundits have tried to predict when housing will bottom out, but that seems to be the mother of all moving targets. The truth is, no one really knows. The amount of leverage and the lack of clarity in the CDO market makes it nearly impossible for anyone to get a firm grasp on when things will begin to mellow out.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy.