The Pareto Principle is one of the more interesting theories of statistics and inequality.  Often called the 80/20 Rule, it states that 80 percent of the effects come from 20 percent of the causes. 

According to RealtyTrac.com's April 2009 data, the theory carries over in real estate, too. 11 states accounted for 80% of the country's foreclosure activity last month despite housing just half of the country's total population.

Despite being concentrated in just a few states, however, foreclosures remain a national problem.  This is because lenders aren't like homeowners; their geographies are rarely limited to just one city or one state.  By contrast, lenders "live" in all fifty states.  And with each foreclosure, their respective loan portfolios get weaker.

Over the long-term, foreclosures force lenders to trim mortgage guidelines, to add new borrowing fees, and to make fewer common-sense allowances.  If you've applied for a mortgage since early-2008, you've experienced this clamp-down first-hand. 

But the other side of the story is that for well-qualified buyers, a foreclosed home can sometimes be bought for a relative bargain and states like California, Florida, Nevada and Arizona are popular as vacation and retirement locations.

If buying foreclosures is part of your real estate plan -- for retirement or as a first-time buyer -- exploit the free 7-day trial at the RealtyTrac website.  Search by state, by county level, or even by zip code.  If for no other reason, you may find a bargain that your real estate agent missed.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.