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The foreclosure rate for mortgages increased to a new record for the three months ending June 30, according to a survey.

Four states are the main culprits in foreclosures as Florida, Arizona, California and Nevada lead the way. For 34 states there was actually a decline in foreclosures.

The survey covered about 44 million mortgages, and of those, 0.65 percent went into foreclosure, setting the new record. The tracking of comparable foreclosure numbers started in 1972. The first quarter of this year produced the former record, which came in at 0.58 percent.

As far as those homeowners late with payments, a significant 6.5 percent are not paying on time.

While this survey covers home that have went into foreclosure, it doesn't cover how many end up being foreclosed on. Some homeowners renegotiate their terms and retain their homes. Some even give up their homes voluntarily to avoid the process.

The market could get much worse because adjustable rate mortgages will probably increase tremendously putting additional pressure on homeowners. Sometimes these mortgages can even double or more over the original payment.

"Then it's not just people who were teetering on the edge who are going to be in trouble," said Ellen Schloemer, director of research at the Center for Responsible Lending. "I think it's going to be worse than we've seen in the history of the modern mortgage market."

This isn't even the worse housing market in some ways, as in 2002 the percentages of mortgages that were past due by over 30 days was larger at that time.

What makes today's market tougher is the tightening of the credit market and declining housing prices. In the past most the time people could refinance or sell their way out of trouble. That's much harder to do in today's market.

A lot of this will hurt regular homeowners, but a significant percentage of defaults will also come from speculators and house flippers who were playing the ponzi scheme hoping they wouldn't be the last one left with the payments. In some states between 20-25 percent of prime loan defaults were involved with homes not occupied by the owner.

Since the survey, which was conducted by the Mortgage Bankers Association, investors from around the world have not been as willing to lend mortgage money for jumbo loans which could make the problem even worse.

"If current conditions persist in mortgage markets, the demand for homes could weaken further, with possible implications for the broader economy," said Randall S. Kroszner, a member of the Federal Reserve Board of Governors.