Surge in foreclosures may be on the horizon

Just as the housing market seemed to show signs of recovery, more foreclosures may be on the horizon.

Richard Green of USC’s Lusk Center for Real Estate says many mortgage borrowers are struggling for two reasons:

Richard Green: "One is their houses are worth less than their mortgage balances because the value of their house has fallen so much in the last couple of years. And second, a lot of them are losing their jobs. We have very high unemployment here in California but even now nationally we are seeing the unemployment rate go beyond what a lot of the forecasters were expecting. So you have people who are under water on their mortgage combined with a bad jobs picture. It’s a really toxic combination."

Green told KPCC’s Patt Morrison that many lenders also temporarily stopped foreclosure proceedings – and that the moratorium for many homeowners is about to expire.

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