CHESSNOID

It’s ironic to hear a government agency be forthright with the truth.  Many bloggers have been discussing the tsunami of foreclosures on the way which will translate into more bank losses.

WASHINGTON (Reuters) -

Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration’s housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.

A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis.

“The recent crisis in the housing sector has devastated families and communities across the country and is at the center of our financial crisis and economic downturn,” Michael Barr, assistant Treasury secretary for financial institutions, told a House Financial Services subcommittee.

What does millions of foreclosures mean to our economy? It means trouble and that even though the recession has been declared to have ended, there is a good chance we will slip right back into another official recession. The origin of this recession has not been dealt with by the Obama administration, and the continued housing bust will make things worse for a true economic recovery.

Barr said a strong housing market was “crucial” to a sustained U.S. economic recovery and noted that analysts say more than six million Americans are at risk of foreclosure in the next three years.