The grim but not unexpected housing data shows U.S. Foreclosure Filings Hit Record 1.5 Million in First Half.



U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc.



More than 1.5 million properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said today in a statement. That’s a 15 percent increase from the year earlier. One in 84 U.S. households received a filing.



The Mortgage Bankers Association said May 28 that prime fixed-rate home loans to the most creditworthy borrowers accounted for 29 percent of new foreclosures in the first quarter, the biggest share of any type of loan.



One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said.



Twenty of the 50 U.S. counties with the highest foreclosure rates were in California and 12 were in Florida, RealtyTrac said.



“I don’t see any turning of the tide,” said Donald Haurin, an economics professor at Ohio State University in Columbus. “The effect of more foreclosures will be continued downward pressure on house prices, and lead to difficulty making mortgage payments that are continuing to reset.”



Payment-option adjustable rate mortgages will contribute to higher defaults, said Rick Sharga, executive vice president of RealtyTrac. About three quarters of those loans will adjust to require higher payments next year and in 2011, with the peak coming in August 2011 when about 54,000 loans recast, according to data from First American CoreLogic of Santa Ana, California.



More than 8.3 million U.S. mortgage holders owed more than their homes were worth and an additional 2.2 million borrowers will be “underwater” on their loans if prices decline another 5 percent, First American said March 4.

Obama Creates Confusion

The Obama administration stokes “confusion and delay” among mortgage lenders when it announces anti-foreclosure plans before completing the program details, a Bank of America Corp. executive will tell Congress.



Announcing programs without providing the rules for how borrowers and lenders should proceed, “creates immediate demand with insufficient lead time for operational readiness,” Allen Jones, a default-management policy executive at Bank of America, said in prepared testimony to be delivered before the Senate Banking Committee in Washington today.



Borrowers are still awaiting the final details of a plan announced in April that would let homeowners rework home-equity debt. Other elements of a broader plan announced in February have been slow to reach the public. The administration said last month that the program, intended to help as many as 4 million people, had only extended modification offers to about 150,000.

U.S. mulling mortgage aid for unemployed

President Barack Obama is mulling new ways to delay foreclosure for jobless homeowners who are unable to keep up with monthly payments, an administration official said on Monday.



But the official said the idea, which is still evolving, was difficult from a policy perspective and carries potential hazards. It could help more people struggling with economic difficulty, but it also could create perverse incentives that distort the housing market, said the official, who did not want to speak on the record about internal administration debates.



"All these numbers keep going up. We are not anywhere near the bottom," said Jay Brinkmann, chief economist for the Mortgage Bankers Association.



The Treasury Department asked the largest 25 mortgage service companies last week to appoint a special liaison officer to work directly with government officials trying to stem defaults.



Voluntary And Involuntary Defaults Rise

Given that the Fed's first mission is to delay, confuse, hope, and otherwise attempt to buy time while engaging in wishful thinking along the way, that Bernanke is willing to admit this may be a jobless recovery is a sign that things will likely be at least that bad. In other words, prepare for a job loss recovery.