It just keeps getting worse. Housing has been in a holding-pattern for seven months now, because of lax FHA lending standards, firsttime homebuyers credit, distressed sales, and the Fed's mortgage-backed securities buyback program. But where's the real, organic demand for housing?

Here's a hint: There isn't any.

The market's in a shambles, decimated by years of fraud and perfidy. What was once a booming industry has become a shrunken, abscess-ridden corpse which sensible people will avoid like the plague. A new home is no longer a sign of status and upward mobility, but a millstone to be shed at the earliest possible opportunity. Housing has a major PR problem. It's gonna take more than the Fed's lame-ass subsidies to trigger a turnaround.

Look, I've been following this fiasco for 6 years now, and I've never read a bleaker report that Tuesday's roundup on CNBC's Realty Check. Here's a couple blurps from the article:

"The average number of days from when a borrower stops paying on his/her mortgage to when the bank sends out the first foreclosure notice is 417....And the final foreclosure can take up to a year more. The government's Home Affordable Modification Program, which today the Inspector General for the TARP wrote, "has made little progress in stemming the onslaught".... is simply delaying the inevitable and in some cases kicking the can and the cost down the road for borrowers who will inevitably redefault and for taxpayers who will foot the bill." (Diana Olick Realty Check, CNBC)

Full-stop. So the banks are taking more than two years to roll-over a house...even when they KNOW the homeowner has NO INTENTION OF PAYING? Are you kidding me?!?

Think about that for a minute. The only reason the banks would do that is if the writedowns from the mountain of forecloses push them into bankruptcy. Which is precisely what's happening. Back to the article:

"Ivy Zelman did a simple exercise of adding shadow inventory to the seemingly improving inventory numbers. In DC for example, she cites a 5.1 month supply of homes for sale, well below the nation's 8 month supply. But add the shadow inventory of foreclosures, and you get a 13.2 month supply. She claims builders "underwriting ground are unaware of these headwinds." Just after she said that, a guy sitting behind me whispered an expletive under his breath." (Diana Olick Realty Check, CNBC)

That's right; it's all about supply and demand, and right now there's way too much supply and flagging demand. The banks are dragging their feet--keeping 5 or 6 months supply off-market--just to keep prices artificiality high. But that's a losing strategy and puts more pressure on their capital which constrains lending.

"On the low end of the market, that is homes priced below $150,000, investors comprise 2/3 of the purchasers, according to Zelman. Another study out today from Campbell Surveys also found that 50% of sales in March were of distressed properties (foreclosures or short sales) (Diana Olick Realty Check, CNBC)

Sure, the lower end of the market is Jim-dandy; it's already hit rock bottom, so things are starting to look rosy. But what about the mid-range and high-end where folks are hanging on by their fingernails hoping the market will stabilize? Is anything selling in that market?

"The trouble of course is the higher end, over $400,000 where investors can't buy with all cash and the mortgage market is closed. Zelman cites a 45 month supply of homes between $400-600,000.

Unfortunately, the government is ignoring the higher end of the market, and ignoring higher end borrowers who may be in trouble due to unemployment. Jumbo loans are excluded from the federal mortgage bailout." (Diana Olick Realty Check, CNBC)

45 MONTHS?!? 4 years to sell a mid-priced home? That's a lifetime!

And how about this little gem from Bank of America via Housingwire:

"Bank of America is considering a special program for unemployed borrowers that would offer as many as nine months of no mortgage payments while they hunt for a new job."

So, the same bank that borrows money from the Fed at zero-rates and dings you double-digits on your credit card if you're a day late, wants to be your friend and lend a helping hand? Are you gonna buy this load of horseshit? Top-hat banksters don't cut a deal unless their backs are against the wall....which they are. If they weren't underwater themselves, they'd toss your sorry-ass on the street faster than your ATM can rack up another overcharge fee. Cha--ching!

And one last thing, in case your not suicidal already. The Treasury Dept recently reported that the number of "permanent" mortgage mods under the Obama whizzbang program, have more than doubled since its kickoff just a few months ago.

According to economist Dean Baker, "This indicates that a very high percentage of the permanent modifications are likely to end in default."

Check. But here's the shocker:

"The money that the government spends on a failed modification goes to banks, not homeowners. Typically, the government will have substituted an FHA insured mortgage for the original mortgage issued by a bank. This means that when a redefault takes place, the bank will have received most of the principle back on the loan, with the government incurring the loss on the redefault." (Dean Baker, CEPR, "Money for Failed Modifications Goes to Banks, Not Homeowners")

Okay. What does it mean? It means that the Obama mortgage flim-flam is another stealth bailout to retrofit banksters into government-guaranteed loans so you and I get saddled with the bill. Now, there's a surprise.

Where's my Zoloff?