Jim Wasserman of the Sacramento Bee wrote in a story the other day that “We’re going to find out now whether foreclosure moratoriums and new loan-modification programs will work”.

It seems the moratoriums have only dammed up the flow, and raised the level; now the dam has burst, three months worth of foreclsosures are going to hit us at once.

Banks and mortgage lenders filed a record 11,049 new notices of default in the Sacramento region in the first three months of 2009, Real estate data provider MDA DataQuick from La Jolla reported Wednesday.

The rise in defaults are happening even as foreclosure numbers and inventories of homes for sale fell for a second straight quarter across the Sacramento area. The same numbers are showing up as well in all of California.

So inventory of available homes on the market has tightened, causing buyers to come off the fence, thinking we have hit bottom. A good thing for the Sacramento housing market; it seems that we have hit a price level, especially in the lower price points, where there is some stability and predictability.

But what happens now that a new wave of foreclosed homes and short sales hits the market? 

43,620 people lost their homes in the first quarter in California, DataQuick reported, raising the statewide number of California foreclosures to 365,000 since 2007.

But , the  135,431 new notices of default filed in the last 90 days brings the biggest challenge for a financially challenged system under pressure to modify loans and stop foreclosures.

Meanwhile, some real estate brokers, agents, buyers, investors and gurus, say they believe the foreclosure slowdowns and moratoriums are simply delaying the inevitable and prolonging the housing crisis.

Sean O’toole of www.foreclosureradar.com has said “Arguably, foreclosure is actually one of the few mechanisms that IS dealing with the real problem at the moment… eliminating the trillions in unsustainable mortgage debt that was taken on nationwide during the bubble years. By delaying foreclosures we only delay the elimination of this debt and the return to a healthy housing market”.