Wall Street's woes are hitting middle class pocketbooks.
At a recent news conference, families who took out subprime mortgage loans shared their horror stories.
John Tankersly laments, "I was able to keep up with the payments, but the interest rate kept going up along with the monthly payments. It went from 9.75%, to 11.75%, and eventually I was paying 14% interest on my home.
According to the firm RealtyTrac , 82 of the top 100 metro areas saw an increase in foreclosure rates this year.
Adjustable rate mortgages are resetting, payments are increasing on first mortgages and home equity loans.
Some homeowners owe more than their home is worth.
Eileen Anderson, of the Community Development Corp. says, "We see people coming in people we're starting to see the effect. They bought at 100 percent or refinanced up to the limit and the house values have dropped some."
The credit crunch that's dragging down the stock market is having a ripple effect: people who planned on tapping into their home's equity to pay for a student's college tuition will have a harder time.
And so are first time homebuyers who may have a tougher time qualifying for a loan.
Economists like Doug Elmendorf say it could get a lot worse, before it gets better.
"It also could spread to make it more difficult to borrow money to buy cars and it could spread to businesses. It could make it more difficult for businesses to get financing for investment projects they want to undertake."
While others are very worried, the White House doesn't seem particularly rattled.
When asked about the economic slump, a spokesman responded: "As President Bush has said, the US economy is fundamentally sound and so we expect to see continued economic growth, not for me to comment on the daily movements of the market. "
according to Realty-Trac. Stockton, California, Detroit and Las Vegas have the highest foreclosure rates in the country.
In stockton, one of every 27 households is facing foreclosure.