Home, Home I'm Deranged

You know that Obama program to reduce foreclosures?  Not working so well.

Foreclosures jumped 14 percent in December 2009 from the previous month, according to a new report from foreclosure listing Web site RealtyTrac.com.

The increase came despite foreclosure suspensions during the holiday season from companies like Citigroup , Bank of America and Fannie Mae .

“Had we not had a moratorium, it would have been even higher than we saw,” said Rick Sharga, vice president of marketing at RealtyTrac.com. “We’ll probably see an increase in the first quarter as well.”

Oh I'm betting it'll go well past the first quarter.  Millions of adjustable ARM mortgages are going to adjust upwards in 2010 and that's going to drive the foreclosure machine.  We're now seeing the third wave of foreclosures in the market, and the fact of the matter is the foreclosure machine is fully self-perpetuating now.

Besides the monthly data, RealtyTrac also released foreclosure totals for 2009. Last year, 2.8 million US properties received foreclosure filings, a 21 percent increase from 2008 and a 120 percent increase from 2007.

The numbers fell short of the 3 million to 3.2 million foreclosures RealtyTrac had predicted for the year because the government's mortgage modification program has temporarily slowed foreclosures that will most likely occur anyway, Sharga said.

“On the surface that sounds good, but it's not really preventing foreclosures,” he added.

Nope, just means an extra 200-400k additional foreclosures in 2010.  As I predicted several times in 2009, without a cramdown provision to allow judges to directly modify mortgage rates, the Obama mortgage modification program would fail.  Cramdown failed twice in Congress in 2009, killed by Democrats each time.

And now, well gosh, the Dems are afraid that in 2010, voters may be upset with them over failing to do something effective about record foreclosures in the country.

Funny how that works.