Conservatives like to say that the problem with the economy right now is all the uncertainty. Of course, their remedy is to repeal everything the Democrats have done and create more uncertainty. But never mind, it’s a talking point, the conservative plan for everything is “whatever they want, the other thing,” it’s not meant to be serious.

However, to the extent that there’s uncertainty in this economy, it’s because of one thing and one thing only: millions of consumers don’t know if they’re going to be able to stay in their homes, and how that will affect their jobs and their lives.

In the first half of 2010, more than 1.6 million U.S. properties were hit with foreclosure filings, which include bank repossessions, default notices and auction sale notices. That’s up 8 percent from the first six months of 2009 and puts the U.S. on pace to top 3 million filings this year. That includes more than a million bank repossessions, and while sub-prime borrowers and bad loans led the surge in foreclosures in 2008 and 2009, this year’s wave comes from homeowners who’ve lost their jobs.

The numbers reflect the widespread and continued fragility of local housing markets amid what’s largely a jobless recovery. They also raise questions about the effectiveness of programs designed to fight foreclosures, such as the Obama administration’s Home Affordable Modification Program.

“If unemployment remains persistently high and foreclosure prevention efforts only delay the inevitable, then we could continue to see increased foreclosure activity and a corresponding weakness in home prices in many metro areas,” said James Saccacio, the chief executive officer of RealtyTrac.

Worse, this impacts the housing market in general, making housing a very illiquid asset that cannot be sold. And then people want to move to land a new job, and they can’t:

Labor mobility has nearly ground to a halt in the past two years, and policymakers are increasingly worried that the slowdown is not just a symptom of the nation’s economic struggles but also a barrier to overcoming them.

With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 — a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.

“In the past, people tended to move to where the jobs are,” said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. “Now it is necessary to have more of a strategy to move the jobs — and create new jobs — in areas where the people are.”

What’s left unsaid here is that the areas which have a decent jobs picture – mainly the Plains states – do not have the housing capacity right now, even if people could move there. The New York Times profiled North Dakota on this point just a few months back. Housing is badly distributed, just as jobs are badly distributed.

Circling back to the McClatchy article, you really get a flavor for the failure of HAMP. Sixty percent of California mortgage counselors have seen at least one of their clients lose their homes to foreclosure while they were working on securing a loan modification through HAMP. The horror stories are widespread and really heartbreaking. This is not a sustainable program, and you can see how it affects unemployment, construction and so many other facets of the economy. Our economic crisis is basically a housing crisis.

…By the way, just as a postscript to yesterday’s story, Rep. Dennis Cardoza did succeed in stripping HUD Secretary Shaun Donovan’s travel budget in a HUD/Transportation funding bill last night. Cardoza specifically wanted to punish Donovan and HUD for their inattention to the foreclosure crisis, although Treasury runs most of the foreclosure mitigation programs.