Indeed, foreclosures rose 14% in December from November. And notices of default, the first step in the foreclosure process, also dropped this fall but had rebounded sharply by December.
"We know the new law has impacted the filings, and there is some catch-up going on now," LePage said. "And there are all of these other avenues that lenders can steer borrowers into now that aren't going to show up as foreclosures. It could be that we're holding steady, and it could be that the distress out there is climbing and not showing up in the numbers."
An analysis by investment bank Credit Suisse suggests that foreclosures will start to taper off this year because the number of subprime loans resetting to higher interest rates has peaked. But there is another potential time bomb: Resets on prime loans will peak at more than $40 billion in mid-2010.
Many of those loans could go into default if the borrowers cannot refinance because they've lost their jobs or their homes have plunged in value, analysts say.
"I think that we're in some ways uncharted waters in terms of the magnitude of the situation that we're facing today," said Peter Tatian, a senior research analyst at the Urban Institute in Washington. "That's why we need some very radical steps to pull us out of the nose dive that we're in."
On the positive side, lenders have come under pressure to work out new payment terms to prevent foreclosure.
"We are working out two troubled loans for every one on which we foreclose, nearly double the ratio of a year ago," said Jumana Bauwens, spokeswoman for Bank of America's Countrywide division, the nation's largest mortgage lender.
But modifications work only if people can show they have the income to make the lower payments.
"You can't work with the bank to modify your loan if you have no income," said Ralph R. Roberts, a coauthor of "Foreclosure Self-Defense for Dummies." "And usually when people lose their jobs and reenter the market they end up with a lower income. That means they will be trying to cover the payments they missed and the new payments with less money."
In California, the areas that have been hardest hit by foreclosures include the Inland Empire, the Antelope Valley and the Central Valley, where many first-time homeowners flocked to buy new homes.
In some San Bernardino County ZIP Codes, there were more than 20 foreclosures for every 1,000 homes. Foreclosures have tended to be less common in more established communities.
