We've all heard the saying 'ignorance is bliss?; but purchasing a house or condominium with this attitude may be until the collector starts sending a homeowner those inevitable letters and they receive phone call after persistent phone call from their loan servicer regarding their late payments. While most people associate the word ignorance with being uneducated, the dictionary defines it 'as the condition of being uneducated, unaware and uninformed?. Many homeowners are completely unaware of the type of loan they used to purchase their home or only understand it in vague terms.

Recent online articles by the National Association of Realtors shows that, foreclosures slipped 4 percent in February 2007 from the month earlier, but were 12 percent higher than the same time in 2006.

"Based on our numbers for the first two months of 2007, foreclosure activity is running at a rate that would project to a 33 percent increase over 2006," said James J. Saccacio, chief executive officer of RealtyTrac.

Their findings showed that states with the highest foreclosure rates in February 2007 were Nevada, Colorado and Florida. Nevada had one foreclosure filing for every 278 households.

Colorado reported one foreclosure for every 345 households, and Florida had one foreclosure filing for every 382 households. Nationwide, there was one foreclosure for every 884 households.

Amazingly, this growing slide into foreclosure status for many homeowners is not surprising nor is its frequency when according to a new poll conducted for Bankrate, about one-third (34 %) of homeowners are completely unaware of what kind of mortgages they have ? even whether it is a fixed rate or an adjustable rate!

What might be contributing to the problem is that a generation ago, mortgages were made primarily through banks and they were usually fixed rate loans. Today, there are many more types of organizations making mortgage loans, some of which are less regulated than banks. Adding to the confusion is the variety of loans now available to borrowers.

In the recent real estate boom, many lenders had aggressively marketed non-fixed rate loans. Statistical surveys of the mortgage market has shown that the percentage of adjustable rate mortgages comprised over 60% of the loans obtained in the last fiscal quarter in 2005. Unfortunately, many homeowners tempted by the attractively low initial interest rates and low or no down payments opted for these loans without a full understanding of what they were signing.

Furthermore, according to the findings in the Bankrate study, 34 percent of home owners with adjustable rate mortgages (ARMs) don't even have a financial plan to meet their financial obligations when their loan adjusts! While 36 percent expect to refinance into a fixed-rate loan, about 28 percent of those who responded say they worry about how they will afford their payments. A rule of thumb any homeowner should keep in mind is that while homeowners may remain ignorant; lenders certainly are not. If any homeowner is not sure of what type of loan they have, they should immediately seek to find out and potentially avoid becoming another foreclosure statistic. If they are aware of what type of loan they have or they did not purchase a house in the last five years, they should share this information with close family and friends who might have and possibly help them avoid future financial problems.

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