GRIEGO: Mortgage crisis finally hits home

By Tina Griego, Rocky Mountain News (Contact)

Published July 24, 2008 at 12:05 a.m.

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The county assessor lists the house as 11/2 stories, three bedrooms, two baths, built in 1907 and purchased in 2004 for $306,000.

It's a nice-looking place, has a farm home feel to it with a long, wide porch sitting high above the street. The owner terraced the steep hill of a front yard, slicing it into segments with stone bricks.

She never finished the work and I didn't think much about it. I rarely saw her. But I didn't much think about that, either.

It wasn't until the weeds in her front yard grew as tall as my children and the grass dried up in long yellow tufts that I started to wonder. Somewhere along the line, the house took on that blank look of abandonment, all the more noticeable because the house next door is a gardener's triumph, bursting with life.

It takes a few minutes to check public records and after I do, I call Verne Harris. A year ago, Harris, a Realtor, told me no neighborhood would be immune from the foreclosure crisis. The subprime market collapse was spreading outward, upward. Well, I told him, it took a year, but you were right. There's a foreclosure on my block. Three doors down.

It's no neighborhood crisis, but it's enough to give me an inkling of the troubles and traumas of places where one lost home became two became three, a block turned into a property value black hole.

I don't know what happened. I wasn't able to reach the homeowner. Delicate subject, anyway. Every foreclosure story is different in its specifics and alike in its broad strokes: Greed or ignorance or plain bad luck; sometimes a combination of all three.

In the end, the piper comes calling.

I take a drive. This month last year, I wrote about the Chaffee Park neighborhood just north of I-70 and east of Pecos Street. At the time, you couldn't drive a block without finding one "For Sale" sign after another, without coming upon the shell of a house someone up and left.

But now I find a different neighborhood. No signs. Former dumps now perky with fresh paint and blooming gardens. I turn down West 50th Avenue and again am pleased to find Mrs. Ernestine Adams, sitting on her porch swing.

"Well, how are you?" she says and scoots over to make room. What happened, I ask. Investors bought up properties and are renting them, she says.

She's got it about right, Verne tells me. The credit free-for-all has become the well-documented credit crunch, shutting some home-buyers out and opening the door to investors with cash.

Not all are investors, says Realtor Donna Solano. The foreclosure she had last year on West Dixie? She sold it to another Realtor who renovated it and sold it to the current owner who's made it one of the prettiest homes on the block.

Prices are firming up, Verne says. If we haven't hit bottom, we're darn close. I repeat this to Zach Urban who says it's a Realtor's job to be optimistic. Urban works for Brothers Redevelopment Inc., a nonprofit housing agency also home to the Colorado Foreclosure Hotline.

So, where do you think we are? In a lull, he says. "And we'll slowly come out of it in 2010, 2011."

I ask about the congressional legislation intended to stave off further mortgage disaster, the so-called bailout.

It'll provide relief for some, he says, for example, credit-worthy buyers having a tough time getting mortgages. But, he says, "it's not going to be the epilogue of the foreclosure story. There is no one-size-fits-all answer. We didn't get into this overnight and we're not going to get out of this soon and I don't think it's something we can rely on Congress to deal with by itself.

"It's always been my caution if you wait for the government to bail you out you will end up on a rooftop in New Orleans."

One last call. Dave Leonard is a Universal Lending mortgage banker. I met him at a presentation he gave at a Brothers' first-time home buyer workshop. He's a veteran of the business and struck me as a straight-shooter or, as he would have it, "an aggressive realist."

His summary aligns with much I've read: Colorado's recovery in the housing market is ahead of much of the rest of the country. We're near bottom right now. Prices are firming up in some neighborhoods. "But are we through it?" he says. "Absolutely not. Are we healthy? No."

Take another drive, Donna tells me. And she sends me to north Aurora. There I find the For Sale signs and the desolate yards and an investor named Robert Moses in front of a home he is showing.

"I wish I had a million dollars," he says. "The banks have so much inventory."

He's a savvy fix-and-flipper scooping up deals with the cash of Roger Sierens, an auctioneer who spent three decades as a financial planner. Neither believes the worst is over. "I just read 700 people at United are going to lose their jobs," Sierens says.

"All 700 people will not save their homes. Most are living paycheck to paycheck. Most people don't have three to six months of living expenses in savings. It's unbelievable. I never thought I'd see this in my lifetime. My parents lived through the Depression. We're not in a Depression, but I do think we are seeing events that could lead to one."

Misfortune for some is opportunity for another, it has always been thus. Moses and his contractors took the house down to the studs and started over. "You want the numbers," Moses asks. Sure, I say.

Sold a few years ago for $152,000. Sat vacant for more than a year. Purchased from the bank by Moses and Sierens for $59,900. Renovations: $35,000.

They're listing it at $139,900, but Moses tells me on my way out, he's willing to make a deal.

griegot@RockyMountainNews.com

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