FORECLOSURE INVENTORIES REACH RECORD HIGH

So, how are those gains in the stock market working out for you? And what about that recovery in the housing market and the economy in general?

The only people making money are those that benefit from the governmental largess; the bankers, investors and insurance companies that get taxpayer dollars to play with. The rest of us?

"Lender Processing Services just put out its "Mortgage Monitor Report," and we have a new record:

The nation's foreclosure inventories reached record highs. February's foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.

Okay, so 7.9 million Americans are not paying their mortgages.

Are we really thinking about the implications of that?

I've already reported studies that show Americans are now far more likely to pay their other bills first before their mortgage (which is a big turnaround historically speaking.)

That means they pay off their credit cards, cable bills, car loans in place of their home loans. Some are forced to, while others are doing so strategically. Don't get me started again on strategic defaults..."
CNBC
H/T The Coming Depression

THE GOVERNMENT RIDES TO THE RESCUE AGAIN

"The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan."
Bloomberg

It seems like this overrides the contract entered into between the homeowner and the lender. If that's the case, all contracts lose their binding power. If that's the case, why in the hell would any bank ever lend anybody any money ever again?

By the way, if this goes into effect all home mortgagor's that have homes that are underwater should default as a group, overwhelm the system and live rent free for years while they try to get it straightened out. Immoral, perhaps. Effective, most definitely.