Recent housing statistics show a 25 percent increase in the rate of residential mortgage foreclosures. This incline in defaulting mortgage loans equated to over 250,000 homeowners receiving foreclosure notices each month since the autumn of 2007.

Many states have responded to these historically high numbers of foreclosure notices and increasing unemployment rates by passing legislation to temporarily stop foreclosures. Housing statisticians say the housing market statistics may not reflect the true numbers of actual lost homeownership. Bankruptcy, short sales and state legislation have aided and slowed the foreclosure process for many homeowners. However, the facts still remains that foreclosure rates are steadily increasing and have consistently grown by a record high, each month, over the last three years. As a result, since August 2007, nearly 1 million homes have been sold in a foreclosure auction.

Major mall operators and retail commercial real estate conglomerates are feeling the effects of the credit crunch and declined consumer confidence to an extent that Chapter 11 bankruptcy may be the only alternative. Consumer spending has significantly decreased as the national and world economies worsen. US retailers head into the most profitable season of the year, but mall retailer occupancy and forth quarter profit projections are at an all time low.

The number two mall operator, General Growth Properties Inc. of Chicago, IL, is faced with refinancing maturing debt during a credit strapped economy and with worsened financials statements. The decline in tenant occupancy and retail sales will weigh heavily on the risk assessment of a credit underwriter, garnering a high interest rate and less cash to assess for these financially stressed mall operators. The residential real estate market started its decline with a very similar situation almost three years ago.

The declining US economy has dampened the consumer spending habits and the results are mall operators are experiencing less rental income and maintaining lower tenant occupancy. In the days to come, many malls may face closure if increased profitability can not be projected soon. The option of filing bankruptcy may be the last saving grace for many of these retail real estate companies while the economy is still slowing.

In an effort to stave a off a further decline in the housing market, the government has announced a plan to prevent foreclosure for homeowners with mortgages guaranteed by Fannie Mae and Freddie Mac. The plan will provide some relief to a small fraction of the still growing number of distressed homeowners. The government hopes that similar programs will be adopted by financial institutions to head off further losses by the banks and the America homeowner.

The government’s mortgage rescue plan will adjust mortgages by lowering interest rates, extending amortization periods from 30 to 40 years and allowing balloon payments at the end of the loan term to defer loan principal. These efforts are being made to bring mortgage payments below 38 percent of the homeowners’ monthly gross income.

Some banks are testing similar programs that even extend to homeowners not in default. These rescue plans are being emphasized in highly depressed economic areas, like Michigan. Michigan has experienced a higher than national average of unemployment and coupled with the automotive industry woes could see an even more dramatic increase in home loss.

Many of the program’s critics think the plan to save homes will only delay the inevitable foreclosure of these saved homes. Secretary of Treasury Paulson’s announcement that the $700 billion bailout would not be used to buy troubled mortgage-backed securities, drove the stock market way down and projected an even bleaker future for the housing market. The government’s new mortgage plan could potentially aid hundred of thousands of struggling homeowners, breathe some life into an ailing housing market and eventually assist in turning the nation’s economy around.

Demos.org’s latest report on the economic status of the middle class is downright scary. As a member of the middle class who’s partner lost his job due to his company relocating across the country, I can tell you people everywhere are literally hanging on by a thread.

My partner was unemployed for 9 months, and though we made it through, according to Demos, we are among only 13 percent of middle-class families that have the assets available to cover living expenses when regular income ceases for 9 months. Seventy-nine percent of families can barely cover the majority of expenses for 3 months, and another 9 percent are “borderline.”

According to Demos, “Twenty-one percent of middle-class families have less than $100 per week ($5,000 per year) remaining after meeting essential living expenses. These families are living from paycheck to paycheck with very little margin of security.” That means any expense like a broken water heater, fender bender, or a trip to the emergency room could spell disaster.

I guess it’s no wonder that after the initial decline in bankruptcy filings after BAPCPA, filings are once again rising. The bankruptcy statistics released by the Administrative Office of the Courts show a total of 132,008 bankruptcy filings in September of 2007, compared to 96,442 bankruptcy filings in September of 2006. Each quarter of 2007 averaged 40,000 more bankruptcy filings compared to 2006.