Foreclosures Fueled by Unemployment

It appears that the continued unemployment or underemployment of Americans is major cause of continuing foreclosures with no end in sight. (See Wall Street Journal article.) This comes as little surprise to me, a bankruptcy lawyer and a real estate broker. Most of my clients could easily afford their mortgage but after taking a 25% to 60% cut in income because of a health problem, the birth of a child, lack of overtime or significantly decreased commissions - many of my clients find themselves in trouble.
The current mortgage modification plan was based on subprime borrowers - who constituted the first wave of defaults. Now unemployment is fueling the foreclosure crisis and it is not limited to subprime borrowers. It includes alt-a loans and prime loans too. According to the Wall Street Journal article, the administration realizes that unemployment is now a significant factor and they are looking at their options. Let's hope they get some advice from some experts in California where we seem to be at the forefront of this problem.