Job losses fuel foreclosure woes in Ind. county

Mike Stuckey Senior news editor • Profile • E-mail

GOSHEN, Ind. - In a house as full of sorrow as it was empty of belongings, Gabriela Aguirre described how she and her husband, Alfredo, reached boldly for the American Dream, clutched it tightly for three years and then watched it slip from their grasp along with Alfredo’s job.

“I’m very sad,” she said softly in Spanish, tears welling in her dark eyes as she surveyed the cozy, two-bedroom tract home. Its walls, carpet and gleaming appliances were nearly as spotless as the day the family bought it, brand new, in 2005. The hardest thing, she said, is her three kids "asking how long before we come back home."

A few miles away in Elkhart, Terry Gonyon was knee-deep in piles of everything from clothing to tools, preparing to leave the imposing red brick house on South Main Street that he and his family had called home for three years.

“This was our dream house,” said Gonyon’s wife, Desiree. “It was a huge turning point for us, moving here.”

The Gonyons and the Aguirres are but two of hundreds of families in economically devastated Elkhart County who are losing their homes to foreclosure. And some local real estate experts say the trend — more closely tied to job losses here than plummeting prices and reckless lending associated with the crisis in California and Florida — could get worse before it gets better.

“It’s just outside of my experience,” said Barb Swartley, president-elect of the Elkhart County Board of Realtors.

Swartley, who has 30 years’ experience selling homes in the area, has observed a huge increase in the number of homeowners attempting to make “short sales,” or get their lenders to accept less than what they are owed on the mortgage. “If the short sales don’t sell, then that’s the next step,” Swartley said. “They’re headed for foreclosure.”

Twice as many foreclosures as '06?
Precise statistics on foreclosures are hard to nail down, but the numbers that are available show a dramatic increase in Elkhart County. Homes offered for sale at monthly sheriff’s auctions, which requires approval of the foreclosure by a judge, increased from 721 in 2006 to 928 in 2007 and 1,150 in 2008. They’re on a pace to surpass 1,500 this year, or more twice as many as in 2006.

First American CoreLogic, one of the nation’s largest providers of real estate data, estimated the Elkhart area’s foreclosure rate on outstanding mortgage loans at 2.7 percent for February. The rate was not nearly as high as foreclosure hotspots in Florida, California and Nevada, but it was well above the national average of 1.7 percent reported by CoreLogic.

Residents, business owners and local officials who have watched a meltdown in the recreational-vehicle and associated industries push Elkhart County’s unemployment rate from below 5 percent to 18 percent in a year wonder how high the foreclosure rate will climb.

“Often the job component is the first one to fall, and then it eventually equates to losing your home,” said Brian Gildea, Elkhart’s economic development director.

That’s just what happened to the Aguirres and the Gonyons. With one breadwinner an immigrant wage-earner and the other a self-employed local native, their paths to ownership were as different as the houses they wound up losing. But their stories illustrate that economic devastation in the region — and the nation — isn’t playing any favorites when it comes to foreclosure. In a growing number of cases, it’s all about the lack of jobs.

Alfredo Aguirre, 30, and Gabriela, 29, followed her father, stepmom and brother to the Elkhart area from Mexico in 2000. Jobs were plentiful in the region’s booming manufacturing sector and employers welcomed Alfredo with open arms despite his undocumented status. He was earning more than $40,000 a year — enough to easily afford the $880 payment on the family’s home —until he was laid off in July by a company that made utility trailers. In fact, overtime and bonuses had allowed him to pay down the principal on the loan, building about $30,000 equity. Gabriela stayed home with the couple’s children, Alfredo Jr., 10, Britany, 7, and Eduardo, 5.

Because of his immigration status, Aguirre could not collect unemployment. He could find nothing that paid anywhere close to his previous wages and settled for a half-time job washing dishes at an Elkhart restaurant for $8 an hour. Within six months, though, the family had run through its savings and was unable to make the mortgage payment.

Gabriela Aguirre tried without success to work out a deal with the lender. Again because of their immigration status, the family was not eligible for help from federally sponsored counseling agencies.

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