Housing Rescue Slows as Foreclosures Increase

With lenders on the back foot following mounting criticism over their sluggish attempts to quell the rising tide of foreclosures, new figures from Hope Now, show its members helped roughly 170,000 homeowners avoid foreclosure in May. The figure however is a 7 percent drop from April's figure of 183,000.

California's Department of Corporations and the California Reinvestment Coalition, which also aim to help beleaguered homeowners, also reported a slowdown.

"The May report demonstrates that HOPE NOW is helping homeowners avoid foreclosure," said executive director Faith Schwartz in a press release. "As promised, the industry has accelerated the pace at which it is helping homeowners."

Foreclosures on the other hand have experienced a sharp upturn, according to figures from RealtyTrac. The number of homes lost to foreclosure during the April and May jumped 35 percent to 73,000, with foreclosure filings up 7 percent in the same period.

The figures from Hope Now have been criticized recently for its accuracy, with Federal Bank regulator, John Dugan calling them "aggregate, unverified results from individual firms."

Schwartz from Hope Now defended the group's numbers and said the coalition was working with bank regulators to develop a common set of standards for such reports.