It seems 2009 was more memorable than anyone hoped it would be as it pertains to the housing market. A record number of foreclosure notices went out in 2009, and more are expected in 2010 to break 2009’s record; how scary is that?

There were around 2.8 million foreclosure notices that went out in 2009. In December alone, 349,000 households were hit with one; Merry Christmas indeed. That happened even though a few banks said they would suspend foreclosures for the holidays. The overall figure was 21% higher than 2008. And it’s predicted that number will grow in 2010 to between 3 and 3.5 million homes.

The thing taking most of the blame is, of course, unemployment. Though its pretty much held steady over the past couple of months, it’s expected to continue to rise. I’ve said here that I think it will shoot up once the February numbers come out because I believe there were a lot of part time temp jobs filled to produce items for the holidays, and to man retail stores hoping for more shoppers. Those aren’t the kinds of jobs that allow people the ability to afford to buy new homes en masse.

What can stem this tide of foreclosures? Last year the government encouraged many banks to put a moratorium on foreclosing on homes, and created a loan modification program that, unfortunately, not many people were able to take advantage of. Most of those who did qualify were only approved temporarily, which means that wasn’t much help, and everyone who was approved took a hit on their credit scores (worthless numbers I keep saying). So, there needs to be more than that.

Last year’s stimulus package turns out to have been used more to keep jobs than to create new jobs. The government points to a number of jobs that were created, saying it was around 640,000 as of October officially, believing it was closer to 1 million jobs, but they also admitting that figure included saved jobs. I tend to believe it had more to do with saved jobs than anything else. One would think that the unemployment rate would have shown at least a minor decrease at some point after the first quarter of the year, when the biggest numbers of people being laid off occurred.

Back to housing and foreclosures. Here’s my opinion and suggestion on some of this.

One, any bank that has more than 35% of their mortgage policies with interest rates of more than 7% should be forced to renegotiate those rates, whether homeowners credit looks good or bad. Banks are creating a lot of debt that’s false debt, earning money that never existed, and it’s hurting a lot of people in a tough economic time.

Two, there should be a moratorium against any bank that wants to foreclose against homes until they’ve reduced that figure to at least 15%. That would really shock the system, but I’m more on the side of people than I am of the banks.

Three, any banks that will be in trouble because of having to do this should be forced to sell off some of their properties to banks that can handle this. Notice that no banks in New York and many other Eastern states were shut down in 2009? Community banks and credit unions seem to know better how to do things; maybe there are some lessons larger banks and lenders need to learn.

Four, local governments in areas where there have been a lot of foreclosures need to go out and reassess properties down to reduce taxes on those who are still in their homes. Yeah, I know those cities and towns need their money, but the truth is that it’s possible by reducing taxes on those homes, and homes that are foreclosed on, it might make those properties more enticing to buyers, and let’s face the fact that communities can’t get paid if there’s no one in the home.

There are my four ideas; anyone have any others?