October 1, 2007 (LPAC)--The Federal bailout programs proposed by the White House and moving through Congress will not stop the national foreclosure wave, according the evidence of a number of new studies and data on the ongoing mortgage meltdown.

Nearly half a million households' payments on adjustable-rate mortgages (ARMs), totaling about $150 billion in mortgage debt, will "reset"--jump upwards--from October through December, and half will lose their homes, estimates a study by First American Loan Performance, which has the biggest mortgage database. Their monthly payments will increase by $400, or 26%. Nearly half of these households will be disqualified from the get-go, from Federal agency purchase or insurance of a new mortgage for them such as Bush's FHASecure program, because they've already missed monthly payments (27%), or owe more than their house is worth on a falling market (20%), or both. "There is no silver bullet from Washington that will prevent home prices from falling further," says the study.

In addition to the Moody's Investors Service study showing that only 1% of these households have been able to get their lenders to refinance their mortgages, the New York Times on Sept. 30 published, in an investigation of Countrywide, America's biggest mortgage lender. The investigation showed that Countrywide's media claims of 40,000 foreclosures prevented by "workouts" this year, are contradicted by what Countrywide told mortgage securities investors on a conference call, which is that it is modifying only about 2,000 mortgages a month, while, all-in-all, Countrywide has 450,000 delinquent mortgage borrowers in total. The company told the investors it very rarely lowers the interest rate on any mortgage loan. Furthermore, some of these "workouts" mean giving up the house voluntarily, to avoid a legal foreclosure, and most others demand substantial fees, new interest charges, and/or new equity down payments which only postpone the foreclosure, while worsening the household's financial situation.

The millions of households facing foreclosure either won't qualify, or won't be able to afford, the "refinancings" to keep them in their homes, which are being promoted by so many in Congress. Rather the only way to stop the foreclosure "tsunami," is to stop it by law, such as the principle so the Homeowner and Bank Protection Act proposed by Lyndon LaRouche.