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Riverside County faces more foreclosures

April 6, 2009 12:00:00 AM PDT
A second wave of foreclosures is set to hit Riverside County.Southwest Riverside County has already seen 16,000 homes go into foreclosure since January 20, according to several real-estate tracking companies.

The first wave of foreclosures was triggered by adjusting subprime loans made during the 2004-2007 boom. Those involved buyers with less than excellent credit scores.

Now mortgages to buyers with good credit histories, who bought more house than they can afford will see their "Alt-A" or "Option-Adjustable Rate Mortgage" loans adjust.

Mortgage experts say the area between Perris and Rancho California, including Moreno Valley, is poised for a second wave of homeowners who will give up their "upside-down" condos and houses.

High unemployment is also adding to the problem. Unemployment in the Riverside-San Bernardino County area is at almost 12 percent.

About 337,000 houses in Riverside County that sold from 2004 to 2007 are now worth less than the purchase prices.

UC Riverside economic professor Mason Gaffney says the crush of foreclosure damages the traditional real estate market as potential buyers focus on bargains.


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