WASHINGTON - December 22, 2008 - The desperate straits of many U.S. homeowners showed in new data released on Monday, suggesting efforts to help them are having limited success.

As the recession throws more people out of work, the rate of re-default on modified mortgages is rising and may worsen as the economy deteriorates, banking regulators said.

After much browbeating from Congress, banks and other mortgage lenders are beginning to do more, to modify home loans so that distressed borrowers can avoid foreclosure.

But the latest figures from regulators raise questions about how modifications are being done and how much they help, even as foreclosure rates hit record-setting levels.

"You have to think that it will get worse before it gets better," John Dugan, the U.S. Comptroller of the Currency, said in an interview with Reuters.

Critics say most loan modifications up until a few months ago were temporary and not aimed at providing for sustainable payment plans, so it comes as no surprise that homeowners are defaulting.

At the same time, a lenders' group known as Hope Now warned on Monday that the number of U.S. homeowners seeking help to avoid foreclosure would double next year to 2 million.