Market swamp

From a dimly lit office in a tiny storefront in downtown Fort Myers, Fla., Cher Averill reaches across her crowded desk and holds up a single sheet of paper. "This is my prayer list," she says.

On the list are the names of some 30 homeowners in Lee County who are about to get bad news: Their homes are going into foreclosure, and Averill is the messenger.

Averill owns a process serving company in Fort Myers, and these days she has plenty of business: Florida has the second-highest foreclosure rate in the nation, according to a recent RealtyTrac report.

During the month of February, the Cape Coral-Fort Myers area where Averill works posted the worst foreclosure rates in the nation among metropolitan areas. One in every 84 homes was in foreclosure. That's seven times the national average.

For Averill, the foreclosure surge overwhelmed her small business. "We went from an average of six or seven cases a day to 55 to 60 cases a day in just six short months," she told WORLD.

Averill hired more full-time staff, but she eventually began diverting work to other companies in town, and still has almost more than she can handle.

Averill reviews her daily list of new cases and also reads the responses homeowners have submitted to the courts. While many people simply borrowed more money than they could pay back, others have also fallen on hard times: Some have lost jobs or husbands or health.

"So many of them rip my heart out," says Averill. "All you can do is just pray-pray that somehow they can put this behind them and go on, or figure a way out."

Figuring a way out is part of Eric Feichthaler's job. Feichthaler is the mayor of Cape Coral, a bedroom community of 170,000 people just over the Caloosahatchee River. Feichthaler took office in 2005 at the peak of the area's housing bubble.

The bubble began growing in 2003 when sunny skies and low interest rates drew thousands of new residents to the coastal area in Southwest Florida. Banks offering so-called "creative financing" paved the way for many buyers to borrow more money than they could afford.

Builders poured in from all over the country, and housing prices soared. From 2003 to 2004, the median price of a home in the area increased by 70 percent. By 2005, the price had shot up another 45 percent.

As the bubble swelled, so did speculative home building. "People I knew were building five, 10, 20 homes, and expecting they would sell them all," said Feichthaler. "It was a herd mentality."

When Feichthaler was elected in March of 2005, the city issued 800 single-family building permits in a single month. "Last month, we issued nine," he told WORLD.

As the supply of new homes drastically outstripped demand, prices fell. Meanwhile, interest rates, property taxes, and insurance costs went up, and mortgage holders began falling behind on payments. Others abandoned homes they couldn't sell. The city's economy-which was largely based on construction and real estate-began faltering.

Since then, Florida voters have approved a constitutional amendment aimed at lowering property taxes and reviving the housing market. Feichthaler believes reducing government spending is also a key to addressing the crisis. To that end, the mayor led his city's efforts to cut spending by $8 million last year. Cape Coral voters gave the mayor a line-item veto to curb wasteful spending as well.

Gary Scharf was part of the service-based economy in Cape Coral. For five years, Scharf owned a landscaping company that hit its peak in 2005 along with the housing market. A year later, the demand evaporated, along with Scharf's business. "I used nearly all my retirement to live off of this past year," he told WORLD.

Like others in Cape Coral, Scharf, who is married with two teenage sons, adapted to a new reality and found a new career: He now serves foreclosure notices full-time. Scharf works for Averill and two other processing companies in Fort Myers. He's been serving since late December.

After dinner each evening, Scharf loads a box of foreclosure notices into the backseat of his car. His task is straightforward: Present the papers, inform the owner he has 20 days to respond in court, and get a signature. What actually happens at homeowners' doors varies each night.

On a recent evening, Scharf pulled into the driveway of the first house on the list. The owner hadn't made a mortgage payment in more than five months. This homeowner politely signed the papers, but Scharf acknowledges that people occasionally grow angry. Still, he says "99 percent" of the people he serves aren't belligerent, and he doesn't carry a weapon or fear for his safety.

After hurrying through a spate of darkened homes, Scharf finally finds another owner at home. Pat Costello has lived in this modest, stucco home with his wife for two years. They bought at the peak of the boom and now owe more than the home's value.

Costello was a real estate appraiser, and his wife was a title agent. Both lost their jobs when the bubble burst. The couple has been trying to short sell their home-a process in which the owner sells the home for less than the outstanding mortgage and turns the proceeds over to the bank. The bank then considers the loan satisfied. "But no one has even looked at the place in three months," said Costello.

Costello isn't surprised to receive the foreclosure notice and is even optimistic about the future. He's only 24 years old and is thinking about becoming a fireman: "I think we'll all be better off in the long run."

Kristen Schroder isn't as sure. The single mother of a teenage son lost her job as a nurse's aide a few months ago. She fell behind on her bills and stopped paying her mortgage. Now she's trying to short sell her home, too. The agent recently dropped the selling price from $149,000 to $99,000.

Schroder is resigned to losing her home and acknowledges, "I probably brought some of this on myself." She's considered moving to Tampa to live with her brother, but there's one problem: "He's in foreclosure now, too."

After hours of serving papers, Scharf says the work is physically easy but emotionally tiring. "I served a lady a few weeks ago who just fell apart in tears," he said. "All I could do is hug her and pray for her," Scharf said.

Scharf finds support at his church, Evangelical Presbyterian Church in Cape Coral. Scharf's pastor, Oliver Claassen, says the 200-member church is struggling, too. Church members have lost jobs and congregational giving is down. The staff members have taken pay cuts, and the church has revamped its budget while trying to help members and outsiders who are struggling financially.

Jorge Acevedo, pastor of the 2,000-member Grace United Methodist Church nearby, says the crisis has hit his congregation hard, too: "Never in my ministry have I seen this kind of ordeal in terms of people being at wit's end." The church is helping members as much as possible, though giving is flat and they've already made staff cuts. "There's not a lot we can offer except for Jesus and prayer and each other," says Acevedo.

So far, that's been plenty. Acevedo says that as the economy has turned down, church attendance has gone up: "If anything, the uncertainty has created a spiritual hunger."

Claassen agrees and says his church has grown as well. "For so long we've been praying that God would lead us to the point where we would be dependent on Him. That's what He's done," he says. "It's a good season."