Another wave of house foreclosures is poised to rumble through Southwest County, further disrupting an economy already trying to absorb the first wave of foreclosures and deal with a growing jobless rate.

"We have unsustainable debt taken out during the housing bubble and it hasn't popped yet," said Chris Sorensen, a Temecula-based mortgage and real estate expert retained by the county to lead a series of classes on avoiding foreclosure.

He says the Interstate 215 corridor will suffer the most in the new crush of foreclosures. That's where much of Southwest County's housing expansion in the last decade has taken place.

In February, the latest month for which figures are available, a record 1,550 homes in Southwest County entered the foreclosure process, up from 1,441 foreclosures in January, according to ForeclosureRadar, a Northern California real estate tracking firm.

Since January 2007, at least 16,000 homes in Southwest County have fallen into foreclosure, according to several real estate tracking companies. The first wave of foreclosures was triggered by adjusting subprime loans made during the 2004-07 boom; these loans often went to buyers with less-than-excellent credit scores.

Just as the number of payment adjustments on subprime loans are winding down, thousands of homeowners across the county now face the same kinds of adjustments on Alt-A and Option-Adjustable Rate Mortgage loans. Those loans typically went to borrowers who purchased more expensive homes; payments were artificially low for the first few years before shooting upward.

This next wave of foreclosures is just beginning. Many real estate experts say adjustments to these loans and the growing jobless rate will accelerate the pace of defaults on Alt-A and Option-ARM loans and traditional loans..

And on top of those Alt-A and Option-ARM foreclosures, the defaults on fixed-rate mortgages given to high-credit-score borrowers has started to increase lately along with spiking unemployment numbers.

How many houses will tumble into foreclosure in the coming months is uncertain but the potential economic disruption is great, Sorensen and other experts say.

About 337,000 houses in Riverside County were purchased from 2004 to '07, before prices began to dive. Almost all of them now are worth less than their owners paid for them.

Sorensen says he is "scared to death" and "hopes he is wrong," but given the county's other economic problems he fears an increasing number of owners of overvalued homes either will no longer be able to make payments or will "make a business decision over a moral one" and abandon their houses.

The coming wave of foreclosures is a "big problem," says Mason Gaffney, an economics professor at UC Riverside.

"More banks are going to show up with negative equity," he said.

That likely will mean a shortage of available commercial loans, which is what businesses need if the economy is to revive, he added.

Moreover, Gaffney said, the crush of foreclosures has damaged the traditional real estate market as potential buyers focus on finding foreclosure bargains.

As did the first wave of foreclosures, the next wave will reverberate through the economy -- but the impact likely will be greater.

"The jobless rate will be a big factor," said Bruce Norris, founder of the Norris Group in Riverside, a real estate investment and training company.

The unemployment rate is almost 12 percent in the Riverside-San Bernardino county area.

Nationally, a banking and mortgage system already choking on hundreds of thousands of foreclosures soon will be forced to take in more. Figures compiled by the group show that some 700,000 homes across the country stand in what's called a "shadow inventory," dwellings that have been taken back by banks but not yet given to an agent.

"When you have an adjustable rate and lose your job, … we will have a lot more foreclosures and people leaving the state to find jobs," Norris said.

Contact staff writer Jeff Rowe at (951) 676-4315, Ext. 2621, or jrowe@californian.com.

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HOUSING: Southwest Riverside County foreclosure crisis hits new high

ECONOMY: Region's jobless rate nears 12 percent