For employment to pick up, consumer demand needs to pick up. For consumer demand - or aggregate demand, AD - to pick up the foreclosure crisis needs to be resolved.

Atrios blogs:

The only way through the foreclosure crisis was some sort of principal modification program. Judicial bankruptcy would have made the most sense, which is presumably why it didn't happen. Absent principal modification, the forgotten foreclosure crisis, and all of its associated impacts, will be with us for some time.

The New York Times has a piece which documents how borrowers are skipping out on their debts in a sort of DIY principle modification program.