How Fannie -- and You -- Bought a Hapless House

Jay Jack of Avery Hess Realtors stands in front of a Fannie Mae home that is for sale -- at a significantly lower figure than what the company paid for it. (By Leah L. Jones For The Washington Post)

"Unfortunately, I got a bad loan," she said. She said it was a "negative amortization" loan. After a year of making her payments, she realized that the principal was increasing rather than decreasing.

"I should have educated myself more, and I didn't," she said.

She also had bad timing: Her loan coincided with the tanking of the housing market in Prince William County.

In 2005, the county had 52 foreclosures. In 2006, the number jumped to 282. In 2007, there were 3,344.

Through August of this year, there were 5,485.

Jones rented out the house until last September, but she had to raise the rent dramatically -- from $900 to $1,500 -- to try to cover the escalating mortgage. When her tenant moved out, she was unable to find a new one. With thousands of empty homes, the rental market was going bust like everything else.

"Once on the foreclosure track, it was a fast track to take it away from me," Jones said.

She defaulted on the loan this past spring.

This has left Fannie Mae in a position it does not want to be in. The company as a matter of policy does not want to own houses or be a property management company. But the housing crisis has left Fannie Mae as the owner of 54,173 properties as of June, according to the company's most recent filing with the government.

The company will not discuss its strategy for selling 14746 Barksdale. But spokeswoman Lorraine Voles offered a broad outline of the Fannie Mae approach: "We get an appraisal. We may get an opinion from a broker. We set the value. And then we see what happens. We're affected by the same things as every other homeowner."

One townhouse a few doors down from 14746 Barksdale recently sold for $119,000, a neighbor said.

The bottom-feeders are out in force.

"This is a good time to buy, so they are hitting the market with a vengeance," says real estate broker Erick Blackwelder.

Carlos Labiosa, the resident manager of the neighborhood association, said that there are 185 homes in the neighborhood, and that maybe 50 or 60 have gone through foreclosure. But it is still a nice place to live, he said. The streets are clean. The homeowners pay a semi-retired person to pick up litter. The biggest problem has been the county's recent crackdown on immigrants, he said. Many were here legally, and they still left.

"They were afraid. 'I'm going to get in trouble with the county. County doesn't want Hispanics; I'm going to leave,' " he said. "They were legal, and they left -- because of intolerance, hatred, division."

The president of the homeowners association, Nick, who declined to give his last name, has been here since 1972, one of the few who stuck it out all these decades.

"It sucks. It's the worst I've seen since I've been here," he said.

He said he thinks about leaving.

"But I have nowhere to go."

Satlin, the original owner of the Barksdale townhouse, said he spent many years buying and selling real estate, but ran into problems a few years ago with Florida properties that went bust. His real estate dealings are over, he said.

He is now a driver and tour guide for the Old Town Trolley.

Staff writers Dina ElBoghdady and Nick Miroff and staff researcher Magda Jean-Louis contributed to this report.