Cracks are appearing in the foundation of the housing market as shock waves — triggered by concern over a surge in bad subprime mortgages — jolted the stock market this week, sending the Dow Jones industrial average downward by more than 243 points, amid fears that a mortgage meltdown in the subprime lending sector could have broader economic implications.

Warning signs already had begun to manifest themselves last year as the recent housing boom was starting to reverse. Although the trend started late in 2005, it accelerated to 1.2 million foreclosure filings in 2006, up 42 percent from the previous year, according to RealtyTrac. That's one home mortgage foreclosure filing for every 92 households. And this may only be the beginning, as the last three months have indicated a speedup in such a destabilizing process.

As the market for risky mortgages collapses, dragging home values and stock prices down with it, many real estate investors and home buyers are seeing opportunities emerging on the horizon.

One of the biggest reasons for increases in foreclosures comes from borrowers buying more house than they can afford. During the height of the housing boom, homeowners avoided foreclosure by refinancing to more risky adjustable-rate mortgages with lower monthly payments.

Now, however, those homeowners — and the many investors who used the same mortgages to buy multiple houses — are struggling to hold on as their payments begin to increase. With fewer loans, fewer sales and fewer options available to struggling subprime borrowers, the future looks bleak for subprime lenders and their battered customers.

As more and more mortgage lenders get stuck with owning over-priced distressed properties, RealtyTrac customers and real estate investors nationwide could be the solution to the broader economic housing woes.

Things could get very interesting in the months to come. Stay tuned to RealtyTrac for all the latest foreclosure news.