Trampled by foreclosure

Jose N. Garcia accepts part of the blame — but not all of it — for losing two houses to foreclosure in the past two years.

“Half of it is my fault and half of it is because the government is a sellout,” the Culpeper resident said Thursday from inside a house he’s renting in Lakeview, a 450-plus home development that began construction along Sperryville Pike in 2001.

“These banks, these companies, all these big shots, they don’t care about me or the working people. All they want is money, and they don’t care who they step on.”

Culpeper’s foreclosure crisis deepened severely last year, and people are feeling the pain. In fact, according to the governor’s Virginia Foreclosure Prevention Task Force, Culpeper had the highest foreclosure rate statewide last March at 2.25 percent.

By year’s end, 467 residential properties went into foreclosure, including a four-bedroom home Garcia owned in Amissville in the county’s northern end.

Garcia, 42, lives with his wife and four children on Holly Crest Drive, a sleepy residential street that lost a dozen families to foreclosure last year, making it one of the hardest hit roads in all of Culpeper.

Likewise, Lakeview leads the way among new developments for total number of foreclosures. In 2008, 55 houses in Lakeview went into foreclosure.

The county saw a 159-percent increase over 2007’s total of 180 properties. This year is shaping up to be equally severe, with 43 properties already entering foreclosure through Feb. 6, according to county records.

Paying the price
Garcia said his problems started when he rented out his townhouse in Woodbridge and purchased the house in Amissville in 2006 to — of all things — be closer to his church.

“We had been in the townhouse four years, had a 30-year fixed mortgage, money in my savings account.”

Garcia had a good-paying job as a concrete engineer in the Dulles area, where he had worked his way up after more than a decade with the same company. The monthly mortgage payment on the townhouse was $1,200, he said, and they were making ends meet.

But Garcia had a heart to get more involved in his church in northern Culpeper and was tired of having to drive so far to get there every Sunday.

His eventual plan was to sell the townhouse to the person renting it, he said, but then that person stopped paying rent. In the meantime, Garcia had locked into an interest-only mortgage for a four-bedroom house on 3 acres in Amissville, paying $2,800 a month to Countrywide.

“I think it was one of those things where they qualify you even though you don’t qualify. To be honest with you, I didn’t understand it that well,” Garcia said of the conditions of his subprime loan — just one of millions of risky mortgages at the heart of the nation’s financial crisis.

“I was more excited about moving closer to my church. Now I paid the price.”

Soon after moving into the older house in Amissville, things started to break down. First it was the heating system, costing $4,000 to replace. Then the well-filtration system malfunctioned, and Garcia was looking at another $3,000 fix.

“We couldn’t pay it,” he said. “We were just flat broke. House broke is what they call it.”

Garcia said Countrywide would not work with him to keep him in the house. They moved out in August.

Countrywide
In July, Charlotte-based Bank of America acquired Countrywide Financial Corp. — a California-based mortgage giant mired in controversy and lawsuits from around the country over claims that it put homebuyers in high-cost, high-risk loans.

Countrywide spokeswoman Ginny Zoraster returned a call from the Star-Exponent Friday seeking more information about Garcia’s situation, but a company statement was not available by press time.

No end in sight
Julie Emery, a real-estate broker based in Amissville, said last week that foreclosures continue to hit the Culpeper market “with no end in sight.”

“Families continue to get evicted from their homes,” she said, “and banks are sitting on a lot of foreclosure inventory that has not yet been listed for sale.”

Culpeper County had 523 homes for sale by the end of January, or about 16 months worth of inventory.

“That remains way too high,” Emery said. “Prices continue to drop. The latest numbers show a 40 percent drop in the average sales price from last year.”

According to the online database of Metropolitan Regional Information Systems, the average selling price for a house in Culpeper was $296,954 in January 2008.

Last month, the average selling price was $191,445.

“As far as whether the prices here will ever recover, of course (they will),” Emery said. “But no one should expect this to happen any time soon. Prices will, at best, remain flat for probably 2009 and 2010.”

Help out there
Jill Tucker, an Orange-based housing counselor with the Foreclosure Prevention Task Force, said the first thing a family at risk of losing its home should do is contact the entity servicing its loan, as many times the mortgage is not with the original lender.

She attributes the high rate of foreclosures to subprime lending.

“That was the major problem,” said Tucker, who provides free services through the Orange County Cooperative Extension office. “(Homebuyers) thought (the interest rate) would remain at 6 percent, and then it jumped.”

Many mortgage bankers calculated what a potential homeowner could afford based on gross income, she said, while a more accurate accounting of income is net pay.

Tucker, a Madison resident, said she’s not sure when the foreclosure crisis will start to correct itself.

“I don’t know if anybody really knows the answer to that question,” she said. “I don’t know if it will continue at the same pace for next year. But when you have families losing jobs who could afford their mortgage and now they can’t, these are the cases you are going to hear about.”

No time to wait
Garcia lost his job as a concrete engineer Dec. 31.

Now, after moving his family three times in as many years, it looks like they will have to move again — out of Lakeview. This time, the financial hardships will likely split them up for a while.

“I am in the process of going back to Woodbridge so I can find a job, live and be closer to work, and they’re going to get an apartment here,” Garcia said of his family’s desire to keep the children in Culpeper schools.

“For us to move everybody back, it’s just too much. So I’m just going to go on my own.”

At this point, the Garcia family is living day by day.

Inside their rental house on Holly Crest Drive last week, a few moving boxes leaned against a wall, half full. Neat piles of financial papers — W-2 forms, unemployment information, bank notices, pay stubs, business cards from potential employment contacts, etc. — covered a dining room table inside the front door.

A TV blared nearby.

Garcia paced back and forth beside the table, occasionally pointing to one paper or another as if trying to emphasize that he’s a hard worker who just fell on hard times. His last pay stub showed that he worked 64 hours, making $36 per hour.

Born in El Salvador, Garcia grew up in Washington, D.C., and has been in the U.S. for the past 32 years, working here since 1986.

He speaks perfect English with the slightest accent. Garcia’s oldest teen girl ran down the steps, saying “hi” before continuing to the living room.

“I told my kids we got to be strong,” he said, admitting that the days of consumerism in his family are over. “We get so full of baggage, you know, once we start making money, buying all these things. I remember when I was single, all I had was a car and a bag.”

Garcia is desperate to find work and remains very doubtful that the federal economic stimulus bill will do him any good. “As far as seeing the money go from the bankers to my house, I don’t see it.”

“What I think,” he said, “is they should open more jobs and quick. If I start working, I can fix this problem a lot faster instead of waiting for the government to decide when they’re going to help the American people.”

Dramatic decline

Residential certificates of occupancy in Culpeper County:

- FY 05-06: 884
- FY 06-07: 379
- FY 07-08: 167
- FY 08-09: 32 *

* Through January

SOURCE: CULPEPER COUNTY
PLANNING DEPARTMENT