After taking a break for the holidays, foreclosures spiked in Santa Clara and San Mateo counties in January. Despite efforts by the federal government and lenders to help people stay in their homes, foreclosures rose 37 percent in Santa Clara County realtor, last month from December, and 71 percent in San Mateo County, according to a report Tuesday from ForeclosureRadar. In another sign that housing woes are far from over, more homes are lingering in the foreclosure process: Homes that were repossessed by lenders in Santa Clara County in January had been in foreclosure for an average of 221 days, or more than seven months. In August 2008, banks took an average of 143 days to foreclose, less than five months. Just what the drawn-out process signals is up for debate. Sean O'Toole, chief executive of ForeclosureRadar, a Discovery Bay firm that tracks foreclosure activity statewide, says it is a sign that foreclosure alternatives are failing. "I think this problem is going to be with us for years to come," O'Toole said. But Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, said more homeowners are staying in the foreclosure pipeline longer because lenders are working to find loan modification solutions. They are also ensuring that a massive wave of post-foreclosure properties doesn't hit the market, driving real estate prices down severely, he said. "Not every loan that goes delinquent is ending up in foreclosure. A lot are being held up while modifications are taking place or short sales are being worked out," he said. The result is "a steady trickle" of foreclosures, "which is much more manageable and doesn't have the sudden downward pressure on home values that a wave does." But it's difficult for the homeowners stuck in limbo. More than a year after first attempting to get her loan terms modified, San Jose condo owner Leslie Martin is within striking distance of a permanent loan modification, but she's not happy with how long it's taken. "It shouldn't take a year. A really smart third-grader could have done it by now," she said Tuesday. "There's no way they can say they are helping the homeowner by drawing it out one year." Martin's mortgage lender, Chase, put her on a forbearance program, which cut her original mortgage payment in half, she said. She's made the required three months of reduced payments and is waiting to hear whether she will get a permanent loan modification. "If I don't get it, who do I call, Obama?," said Martin, 46, a meter reader for the city of San Jose. "There's no structure to this. It's totally chaotic." Gary Kishner, a spokesman for Chase, said, "The bank's been working with the customer, Ms. Martin, exploring all options available to her to help her stay in her home." Chase has modified about 60,000 loans on its own and about another 7,100 through President Barack Obama's Home Affordable Modification Program (HAMP), he said. HAMP is designed to help eligible homeowners reduce their loan payments to affordable levels. Like many other borrowers seeking help from their lenders, Martin described a loan modification process that has been confusing, complicated and time-consuming. Worried that they're making payments on homes that will be foreclosed on eventually, some borrowers walk away. But Martin said she put a down payment of $80,000 into her home and does not want to walk away. Many others are in limbo, too. ForeclosureRadar's data showed that the number of homes scheduled for sale at auction has been on an upward trend since early last year. But the final step in foreclosure, the actual sales, are not increasing at the same pace. In Santa Clara County, for example, there were 4,850 homes scheduled for auction sale at the end of last month. But lenders completed only 437 foreclosures. One year earlier, 1,728 were scheduled for auction. Lenders completed 457 foreclosures. The same phenomenon occurred in San Mateo County, where there were 1,687 properties scheduled for auction, but only 159 foreclosures last month, compared with 544 properties scheduled for auction and 114 foreclosures a year earlier. Kevin Stein, associate director of the California Reinvestment Coalition, which has advocated for better solutions to the foreclosure crisis, said the ForeclosureRadar report pointed to the weakness of the federal loan modification program. "It doesn't deal with the issues that are really heating up in California, and those are borrowers who are underwater and people losing their jobs," he said. "What we need is a more aggressive policy around loan modifications, where more people qualify, and which makes sure banks honor the program." Statewide, foreclosures climbed to 17,610 in January, up 17 percent from December and up 14 percent from January 2009.