PAIN IN THE MEMBRANE or SHOW ME THE BEEF

NEW YORK (CNNMoney.com) -- Despite all the hand-wringing and attempts to contain the foreclosure plague, the problem still spread during the first three months of 2009, as the number of foreclosure actions started hit a record high, according to a quarterly report.

The National Delinquency Survey released Thursday by the Mortgage Bankers Association (MBA), reported the largest quarter-over-quarter increase in foreclosure starts since it began keeping records in 1972. Lenders initiated foreclosures on 1.37% of all first mortgages during the quarter, a 27% increase from the 1.08% rate during the last three months of 2008 and a 36% rise from the first quarter of 2008. All told, more than 616,000 mortgages were hit with foreclosure actions.

Delinquencies, the stage in which borrowers have fallen behind on payments but have not yet received foreclosure notices, also hit record highs, with the seasonally adjusted rate at 9.12% of all loans, up from 7.88% last quarter.

"Now the ball is in the Federal Reserve's court, as they could step up the pace of their bond buybacks in an effort to reverse some of this week's increase," the report said. (this is what I had been saying.....boy the FED can do it all)

Even as mortgage rates continue to rise, they still remain much lower than last year, when the average 30-year fixed mortgage rate was 6.20%, according to Bankrate.com.
Is a commercial real estate bust inevitable?
Bank lending has slowed, but securities issuance has fallen off a cliff.

The government hopes to restore lending via cheap financing. Skeptics say programs aimed at restarting the market haven't worked yet.

The government has responded with programs such as the Federal Reserve's Term Asset-Backed Loan Facility, which aims to spur asset-backed lending. But there are few signs that these efforts are succeeding in restoring the health of markets that collapsed in 2007 after years of breakneck growth.

Developers say they are confident the administration and Congress understand that they need more help.

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