According to a report released by RealtyTrac Inc., on Thursday, the U. S. foreclosure filings rose by 5 percent in January and exceeded 300,000 for the 11th consecutive month, as modification programs failed to keep delinquent borrowers in their homes.

"It's almost inevitable that modifications will fail", said Michelle Meyer, a New York-based U. S. economist for Barclays Capital Inc. "Over the next several months, we should see REOs increase at an accelerated pace", he added.

"If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works", said James J. Saccacio, RealtyTrac's Chief Executive Officer.

In a separate report, the Labour Department has said that the unemployment rate has unexpectedly fallen to 9.7 percent, in January, and payrolls have dropped by 20,000. About 8.4 million jobs have been lost since the recession began in December 2007, with more than 4 million cut since Obama took office in January 2009.