The current credit crunch is severely affecting some companies, such as Countrywide Financial (NYSE:CFC), Pulte Homes (NYSE:PHM), and Toll Brothers (NYSE:TOL) -- and their shareholders. It's also leading to many Americans losing their homes to foreclosure.

How bad will it get? Christopher Cagan, director of research and analytics for First American CoreLogic, studied 8.4 million adjustable-rate mortgages inked in 2004, 2005 and 2006. He estimates that about 1.1 million of those borrowers will lose their homes in the coming years as interest rates are reset on their loans, raising monthly payments to levels they can't pay.

You may be tempted to wipe your brow and heave a sigh of relief if your mortgage is safe and your portfolio isn't chock-full of home builders and lenders. But don't assume you're getting off scot-free in all this.

According to Harper's Index, for each foreclosure that takes place within a one-eighth-mile radius, your home's value decreases by an average of 1%. So if there are five foreclosures in your neighborhood, your $300,000 home may suddenly be worth $285,000.

That may not be a big deal if you plan to stay put for another decade or two. But if you want to sell soon, you're facing a significantly smaller gain on the sale than you might have expected -- or perhaps even a loss.

What to do
If you're looking to sell, take these issues into account. The folks at the Credit Union National Association suggest that you price your home less ambitiously, and prepare to market it aggressively, because you'll be competing with other sellers for fewer buyers. Not as many people will qualify for a mortgage in the near future as did in the near past.

Meanwhile, if you're looking to buy and have a solid credit rating, you stand a chance of snagging a very good deal.

Learn more
If you're interested in home buying and selling issues, visit our Home Center. You might also want to read: