The number of home repossessions has risen by 50 per cent in just 12 months in the West Midlands, as households struggle to cope with mortgage payments.
Banks and building societies have blamed rising interest rates for the problem.
But politicians are accusing the lenders of failing to warn customers about the risks involved in taking out a mortgage they may not be able to afford.
Vince Cable MP, Liberal Democrat shadow Chancellor, said: "The housing bubble is bursting for many homeowners."
Latest figures from the Department of Constitutional Affairs show 832 mortgage possession orders were issued by the county courts in the West Midlands from July to September last year.
But this has shot up to 1,238 in the same period this year, an increase of 49 per cent.
The figures include orders which allow homeowners to be evicted immediately and suspended orders, which give the homeowner a set period to pay off their arrears and start making payments again.
The number of court actions brought by lenders rose from 1,216 to 1,699, an increase of 40 per cent.
Rising interest rates have pushed up mortgage payments in recent months.
Although the Bank of England cut its lending rate to 4.5 per cent in August, the cost of borrowing rose from 3.5 per cent to 4.75 per cent between November 2003 and August 2004.
The Council of Mortgage Lenders said debt from credit cards and personal loans had added to the problem.
More than 300,000 Britons now owe at least £10,000 on their credit cards.
However, the CML said it expected repossessions to hit 10,000 across the country this year compared with a peak of 75,500 in 1991.
Mr Cable said: "The Government needs to urgently look at the payment protection insurance markets as products are often overpriced."
