With mortgage refinancing applications up recently and house prices on the rise in recent months, some might believe there is reason to be optimistic about the struggling housing sector. I don't subscribe to this belief. Instead, I look for delinquencies and foreclosures to spike in the slow economic growth, high unemployment quarters that probably lie ahead.

Already, real estate owned (REO) by lenders due to foreclosures -- perhaps the most hated term among bankers -- is climbing. Estimates are that a major share of the 7 million houses that have delinquent mortgages or are in some stage of foreclosure, as well as those yet to come, will be dumped on the market, adding to the already huge excessive inventory glut. Some 4.5 million loans are now in foreclosure or at least 90 days delinquent.

As the song goes "what a difference a day makes." On Wednesday President Obama unveiled his $275 billion housing plan to help stem the tide of foreclosures. By the next day, mortgage lenders' phones were ringing off the hook. Lending Tree, the online mortgage lender had the highest loan request volume day for the month. Traffic at Zillow.com was up 56% on Wednesday.

While the program announced on Wednesday will help the foreclosure problem, it does not contain a provision for servicers to modify mortgages. Professor Chris Mayer, senior vice dean at Columbia University said that 50% of mortgage servicers have some kind of restriction on loan modification which can only be changed through legislation.

This post is part of a series where personal finance expert Dan Solin looks at money moves that may seem smart in tough economic times, but are actually quite dumb. See all 12.

Lucky you. You have a fixed rate mortgage. However, the payments are a stretch for your budget and you have mounting credit card bills that you are paying off at a high rate of interest.

A friendly "debt counselor" suggests that you refinance your mortgage at a variable rate. Your initial mortgage payments will be less than your fixed mortgage and you will be able to pay off some of those high interest rate credit card debts with the cash you generate. As an added bonus, your mortgage payments are deductible, but your credit card interest is not.

Everyone's a winner. Right?

Not exactly.