Area Suburbs See Rise in Foreclosures

Their home is being advertised by the lender as a pending foreclosure.

"My wife loves this house," he said. "But we can't pay for this house. We need to find something less."

The Ripple Effect

Neighbors greet the news of an impending foreclosure with trepidation mixed with compassion. They are often aware that the family is under financial pressure, something to which they can relate. Steve Courtnemanch, who lives in a townhouse on Gunners Place in Centreville, said he hadn't really understood that his 6.5 percent interest-only loan was going to readjust to 10 percent, which would have meant a steep payment hike. He refinanced the loan and got himself out of the squeeze, but it made him more sympathetic to the neighbors a few doors down who are losing their townhouse to foreclosure.

Sitting in his front yard on a recent sunny afternoon, Emery St. Clair tallied on his fingers seven or eight recent foreclosures that have occurred in the middle-class, 1950s-era subdivision in Manassas where he has lived for 44 years. The houses, with a median value of about $300,000 -- down 14 percent from a year ago -- fell into disrepair, and people started renting out rooms to stay afloat. But they still couldn't keep up with the payments.

"A lot of people bought these houses way too high, and they're going that way," St. Clair said, shaking his head. "People can't afford to stay in them any more."

If foreclosures multiply in a neighborhood, with lenders eager to dump properties for a quick sale, home prices can be depressed. The drop in prices can pull down tax assessments, giving local governments less money to pay for schools, police, parks and social services.

So far, the Washington area has been less affected by the foreclosure surge than some other parts of the country, such as Colorado, Nevada, Florida, Michigan and Ohio. The total number of advertised foreclosures in the region -- 2,686 in the first five months of the year, more than double the amount in the same period in 2006, according to Realtytrak -- are dwarfed by the total number of regular sales. In the region, 25,683 homes changed hands in traditional sales in those five months , according to the Metropolitan Regional Information Systems.

The increase in foreclosures is nevertheless a cause for concern for government officials in both Maryland and Virginia.

Maryland Gov. Martin O'Malley (D) recently announced a $111 million loan commitment effort to help home owners facing foreclosure and created a task force to study ways to prevent the abusive loan practices that can lead to mortgage delinquencies.

"Real estate tax income is our highest source of revenue to provide county services," said Fairfax Supervisor Sharon S. Bulova (D-Braddock), who chairs the budget committee. "Our budget is comprised almost 60 percent from real estate taxes. . . . We are watching very carefully, as we are affected very definitely by what happens in the real estate market."

The costs of foreclosure can be steep: For each abandoned house, a city can lose up to $20,000 in unpaid taxes and utility bills and for upkeep and maintaining essential services, according to a report by the Joint Economic Committee of the U.S. Senate. Another study cited by the committee reported that home prices fall about 1 percent for each foreclosure that occurred nearby.

The first effects of a foreclosure are cosmetic, as many Washington area residents are starting to learn. People facing foreclosure typically lack the time or money to maintain their homes, and then end up abandoning them. Torn screens are not replaced, the grass goes uncut, yards turn to weeds.