On the other hand, housing prices aren't falling much, as you'd normally expect. In fact, they went up a bit in March. Very weird.
Offhand, my guess is that the problem isn't that this will push the economy into recession. Rather, the problem is that this is happening even though the economy is reasonably strong. But strong economies don't last forever, and if the economy starts to go south even a little bit while foreclosures are still rising, it could start a pretty vicious chain reaction. Keep your fingers crossed.