The Frederick News Post has this from Virginia. "Worried Fredericksburg-area homeowners may start calling Ken Scruggs if the Federal Reserve raises rates. The (mortgage broker) in Fredericksburg said people with adjustable-rate mortgages, or ARMs, are getting anxious to lock in a fixed-interest rate."

"'We're seeing people coming in now out of fear,' he said. 'They'd rather refinance now than take a chance that [interest rates] will reach 9 [percent] or 10 percent in a few years.'"

"An increase of just a few percentage points can make a huge difference in mortgage payments. A monthly payment of $1,500 on a $500,000 ARM, for example, doubles to $3,000 when interest rates climb from 3 to 6 percent. 'There are not a lot of people who can come up with $3,000 a month,' Scruggs said."

"Some residents are struggling to hold onto their houses. The number of foreclosures in the Fredericksburg region has climbed from 19 in the first quarter of 2005 to 80 during the same time period this year."

"Stafford and Spotsylvania counties had the most foreclosures locally. The number jumped from 10 in the first quarter of 2005 to 36 in the first quarter of 2006 in Spotsylvania, and from 3 to 29 during the same time frames in Stafford. Those also are among the fastest growing counties in Virginia and the country, which means that more people have been taking out mortgages on houses, second homes and investment properties, pointed out Mike Fratantoni, senior economist for the Mortgage Bankers Association."

"The handful of foreclosures that Ron Davis, CEO of Virginia Heartland Bank, has seen, for example, involved people who had bought property with the intent to sell, but got stuck with unanticipated mortgage payments when the real estate boom started to stall."

"'Between the fourth quarter of 2005 and the first quarter of 2006, there was an increase of $300 billion in mortgage debt outstanding nationally,' he said. 'It's a $9 trillion dollar market that's been growing at a double-digit rate.'"

"That's small comfort, however, for the people who wind up coming to Deanna Hathaway for advice. She's an attorney for Boleman Law Firm in Richmond, which specializes in bankruptcies and foreclosures. One of the first steps they tend to take is to pay off their debts by tapping into their house's equity or refinancing, Hathaway said. Mortgage lenders have come out with a number of new loans that can make this attractive."

"'Anyone considering refinancing should come in with a long-range financial plan rather than in a panic,' Scruggs warned. 'They shouldn't refinance just because they want to buy a pickup. That catches up with you.'"