Every time we get the monthly foreclosure numbers from RealtyTrac, I hear someone on TV say, 'Well, the problem is really only concentrated in a handful of states."

Yes, the volumes are, the problems are not.

Take a read from the RealtyTrac release:

"Five states accounted for 51 percent of U.S. foreclosure activity in May, led by California, where 51,906 properties received a foreclosure filing during the month.

A total of 19,192 Florida properties received a foreclosing filing in May, the second highest state total despite a 62 percent decrease from May 2010

A total of 14,614 Michigan properties received a foreclosure filing in May, the third highest state total, followed by Arizona, with 13,122 properties receiving a foreclosure filing during the month, and Nevada, with 11,039 properties receiving a foreclosure filing during the month.

Other states with foreclosure activity totals among the nation’s 10 highest in May were Illinois (10,574), Georgia (10,503), Texas (9,055), Ohio (8,379), and Wisconsin (4,660)."

Reed Saxon / AP Foreclosure property in Pasadena, California.

I would argue that despite these numbers, the foreclosure crisis affects every market in every state in the nation, due to the direct correlation to falling home prices.

First, foreclosures affect consumer confidence, and I've said over and over, all real estate is local, but consumer confidence is national; just hearing the national numbers makes local buyers skittish.

Second, the states with the most trouble are the states with the highest volume of sales, and that directly affects the big banks, which directs lending, which directs regulatory reform, which in turn affects all of us.

"What we’re talking about are really markets that drive a lot of the real estate market, a lot of the economy," notes RealtyTrac's Rick Sharga. "And these are states that have had really severe foreclosures. But beyond that, 72 percent of the top 200 markets saw an increase in year over year foreclosures activity in the last year."

Even if the volumes in your neighborhood don't match the streets lined with foreclosures in Phoenix, rising foreclosure volumes will put downward pressure on your home price. Cities like Atlanta, Chicago, Minneapolis have seen big percentage jumps in foreclosures and bank repossessions. While the actual volume numbers in those cities may not be as bad as, say, Port St. Lucie, FL, they represent a big change in the way those local markets work and you can extrapolate that anywhere.