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Delinquency rates for mortgage borrowers continue to spike. Homes entering the foreclosure process reaches a record high in the second quarter.

As Americans falling behind on mortgage payments continue to rise, homeowners and people in the real estate industry are left wondering “when will the bleeding stop?” Day after day we are flooded with the dire news of home foreclosures, short sales, lender layoffs, over supply of home inventory, etc. Latest news indicate that loan delinquency rates (which potentially leads into the foreclosure process) hasn’t even peaked yet. This is because another slew of Adjustable Rate Mortgages (ARMs) are scheduled to reset into higher rates this fall. At which time we will again be inundated with another onslaught of news pertaining to the “mortgage default nightmare”.

So will help arrive in time? At the moment, there are several initiatives being discussed in Washington to help home owners refinance from the now dreaded ARMs to fixed mortgages. Furthermore, regulators has recently informed mortgage servicers that it is actually not illegal to rewrite mortgage terms as long as the new terms benefit the borrower. This will give mortgage servicers more flexibility in modifying current loan terms in an effort to help borrowers keep their mortgages in good standing.

At what point will any of the proposed initiatives slay the “Foreclosure Dragon” and once again give confidence to the credit market, is left to be seen. Two things are for certain. Lenders make (lots of) money by selling loans. And the importance of the credit market to the U.S. economy is painfully obvious. So for all those home owners and real estate professionals who are able to hang on, fret not, because as history has shown us, the credit market will have to eventually open its gates again.