Rising unemployment suggests even higher foreclosures in 2009

Despite all of the Palin-McCain talk about "socialism" they still can get around the fact that what we have witnessed (and continue to experience) is socialism for CEOs and the elite. People who pumped up the market and made commissions at every turn are still sitting on those profits. Look at those "failures" in the banking industry who were handed the keys to Fort Knox, without question. Even now, Wall Street is receiving the rescue package and yet they still are paying out $70 billion in 2008 bonus money. How the heck is this even possible? Good work, when you can get it. For everyone else, not so much.

If 2008 was a record year for mortgages entering foreclosure, 2009 could look even worse: While home-price declines have been driving foreclosure starts recently, mounting job losses could add another layer of stress on American homeowners, the chief economist of the Mortgage Bankers Association said on Tuesday.

A recession appears to be underway, according to the MBA's annual economic forecast, which projects negative economic growth through the middle of next year. The MBA presented its forecast to reporters Tuesday at its annual convention, being held in San Francisco.

Unemployment also will likely accelerate, perhaps reaching 7.7% by the end of next year, making it tougher for some people to stay in their homes, said Jay Brinkmann, chief economist of the MBA. He doesn't expect a rapid recovery in the jobs market, either: Unemployment won't decline until late 2010, according to MBA projections.

And while new-home production has decreased, the housing market will still continue to struggle with high inventories of for-sale properties. "Even though we see the new-home inventories falling, we see existing-home numbers increase," Brinkmann said.

No surprise, then, that he also doesn't expect home building to ramp up again soon: New-home sales will be down by 36% this year, compared with last year. Next year, new-home sales will be down by 12% -- though perhaps reaching a bottom in 2009. Sales are expected to rise 25% in 2010.

And remember, the MBA has often given a rosier-than-reality assessment of the market so if this is what they are saying in public one can imagine what they are saying behind closed doors.