While mortgage industry efforts to stem the tide of foreclosures are producing some results, a consumer group says those efforts are not nearly enough. The Center for Responsible Lending warns the current crisis in the housing market dwarfs the mortgage industry's response to it.

Meanwhile, existing-home sales fell during March after making a surprise climb in February. Home resales fell to a 4.93 million annual rate, a 2.0% decrease from February's unrevised 5.03 million annual pace, the National Association of Realtors said.

Hope Now, an alliance between counselors, servicers, investors, and other mortgage market participants, recently reported that from July 2007 through February 2008, the industry had provided loan workouts that enabled about 1.2 million homeowners to stay in their homes.

"The industry is dedicated to minimizing foreclosures," said Faith Schwartz, Executive Director of Hope Now. "While Hope Now is not the only answer to this issue, the alliance's outreach efforts have had a significant impact on encouraging consumers to connect with their servicers. We are seeing real results."

But the CRL worries that it may not be enough. The group reports the number of seriously delinquent loans and new foreclosures in Jan/Feb 2008 was over 2.1 million, an increase of 8 percent over the previous quarter and 55 percent from a year earlier.

Almost 18 percent of subprime loans were seriously delinquent or started foreclosure in Jan/Feb 2008, the group says.

In the first two months of 2008, 17.5 percent of subprime loans were 60 days or more delinquent or had started foreclosure, up from 15.9 percent in the last quarter of 2007 and 10.7 percent in the first quarter of 2007.

Soaring foreclosures

At the same time, the number of foreclosures continues to soar. Hope Now has projected that more than two million loans are estimated to enter foreclosure in 2008, an increase of 38 percent over 2007. It estimates that completed foreclosures will climb 57 percent from 2007 to 2008.

In a March 2008 analysis, the real estate marketing firm RealtyTrac noted that foreclosures had dipped slightly from January to February, but concluded that is it unlikely the U.S. market has hit a ceiling in terms of foreclosures.

"The February monthly decrease is more likely a seasonal decrease helped along by a shorter-than-average month and the fact that January's numbers are often padded with some pent-up foreclosure activity from the holiday season," the authors wrote.

The report also focused on the year-over-year increase, which has been between 50 percent and 60 percent for both January and February. If you look back at the RealtyTrac monthly reports, activity has increased on a year-over-year basis every month since January 2006, the first month that YOY stats were available.

CRL's solution? The group said it would like to see federal action.

"What is abundantly clear is that Congressional action is needed to enable bankruptcy courts to require loan modifications," the group said in a release. "This legislation would be in the interest of borrowers and investors alike."