This paper outlines the financial difficulties which home owners in the Federal Republic of Germany (FRG) have been experiencing over the 1980s. The discussion is preceded by a brief outline of the housing market for owner-occupied dwellings. The paper then outlines the scale of the problem of home owners in financial difficulties and refers to house prices, housing finance and state subsidies. The extent to which the growth of home ownership has brought owner-occupation within the reach of middle and lower income households, and the particular conditions of the housing market which affect those home owners who run into financial difficulties are considered. Reference is also made to research which has been carried out into the particular plight of households threatened with compulsory auction proceedings. In the conclusion possibilities for reform of housing finance arrangements and compulsory auction proceedings are outlined.