Foreclosures continue

U.S. Treasury Department statistics indicate problems still are undermining the success a government program to help homeowners stay in their homes.

Rising foreclosures, along with unemployment, have proven among the most stubborn problems associated with the recession, having run into layers of reluctance among banks and even some homeowners who don't want help if it only keeps them in a home worth less than what is owed on the mortgage.

In a recent Treasury report, the number of homeowners dropping out of the federal Making Homes Affordable program after they had received loan modifications nearly doubled in March, The New York Times reported Thursday.

The number to start with might be the 7 million U.S. homeowners behind on their mortgages and from there go to the 4 million the government announced Making Home Affordable was designed to help. From there, the number drops precipitously to 230,000 -- the number of homeowners whose mortgages have so far had their loans modified and kept up payments for three months at an average savings of $512 a month, which puts them on permanent status.

But the Treasury said 2,879 homeowners with modified loans dropped out in March, almost twice the number that dropped out in February.

Take the numbers to extremes and you come up with 37, as the number of homeowners in the program who have successfully paid off their mortgages, presumably because the house was sold, The Times said.

The Treasury Department acknowledged some homeowners who stick with the program long-term could run into financial problems. While defaults rose in March, so did the number of participants who made payments for three months and whose loans modifications were deemed permanent.

"One percent of these loans defaulting is a tiny fraction," said Shaun Donovan, secretary of Housing and Urban Development. "Given how stressed these borrowers are, even in the best situation, there will be redefaults."

Elizabeth Warren, chair of the Congressional committee overseeing the Troubled Asset Relief Program, said: "It also seems clear that Treasury's program will not reach the overwhelming majority of homeowners in trouble."

In market news this week, Intel and Alcoa started the corporate reporting season with encouraging numbers just as the Commerce Department said consumer prices rose 0.1 percent in March, putting inflation well within the Federal Reserve's target rate.

The numbers are low enough to expect inflation is off the table regarding monetary policy. Indeed, the Fed's Beige Book released Wednesday sounded a note of cautious optimism.

In international markets Thursday, the Nikkei 225 index in Japan rose 0.61 percent, while the Shanghai composite index in China fell 0.04 percent. The Hang Seng index in Hong Kong rose 0.16 percent, while the Sensex in India fell 1.03 percent.

In Australia, the S&P/ASX 200 rose 0.15 percent.

In midday trading in Europe, the FTSE 100 index in Britain rose 0.06 percent, while the DAX 30 in Germany lost 0.16 percent. The CAC 40 in France lost 0.05 percent, while the pan-European DJ Stoxx 50 gained 0.22 percent.