No Rockwell here

Several inches of crusted snow and ice blanketed the side streets of Denver's urban neighborhoods on a recent Wednesday morning. Brilliant beams of sunshine poured in from a cobalt blue sky overhead, melting surfaces into glistening sheens and tickling shadows with warmth and light. The scene smacked of postcard America.

But underneath the sparkling drifts of white, abandoned homes sealed up for the winter testified in silence that this was no Rockwell. One particular two-story cottage-style home now three years vacant displayed signs of an upcoming public auction and a minimum bid of just $25,000. On another hapless block nearby in the Villa Park neighborhood west of downtown, three homes showed signs of foreclosure.

It's enough to disquiet local resident Ernesto Montes, who stood outside on this day brushing snow from the old pickup he uses to operate a family landscaping company. Winter weather is always bad for business, but this season has socked Montes with extra financial pressure: His mortgage payment just jumped up $170 per month. "It's tough right now because we're not working a lot," he said. "All we can do is try to sell vehicles that we have and try to survive over the winter."

Like many residents throughout the greater Denver area, Montes purchased his home on a two-year adjustable-rate mortgage (ARM), which offered a low introductory interest rate and monthly payment only later to adjust upward. He is concerned that he may need to sell the property this spring, but finding a buyer is no guarantee in a deflated market where home values have dipped below what many owe on their mortgages.

That story has become all too common in Denver and throughout Colorado, one of several states hit particularly hard by the national housing crisis. The number of statewide foreclosure filings last year totaled 39,915-almost triple the amount in 2003. And statewide foreclosure sales in 2007 topped out at 25,320, more than four times the 2003 mark.

Such figures began ticking up appreciably in 2005, making Colorado an early warning sign to the rest of the country still drunk on subprime loans and skyrocketing equity. Some state officials optimistically believe that since Colorado was among the first to enter the national real estate slump, it might also be the first to come out. Gov. Bill Ritter told WORLD that he is hopeful that state action to increase financial counseling services will significantly reduce the problem this year.

Indeed, the state's Division of Housing has teamed up with private organizations to offer mediation between lenders and delinquent homeowners. The program has helped thousands of people avoid foreclosure through such processes as short sales and deed-in-lieu-of-foreclosure agreements.

But tens of thousands more remain in danger. And the impacts on communities stretch beyond financial to social, emotional, and even spiritual. Local churches have taken notice.

James Fouther, pastor of the United Church of Montbello in northeast Denver, turned left out of the church parking lot and drove along Andrews Drive through the heart of one of the city's poorer neighborhoods. "They call it Mont-ghetto," he said, pointing out rampant "for sale" signs dotting the dense residential streets.

Fouther came to the church in 2003 and began to see preliminary signs of housing trouble not long after. Folks simply couldn't afford to stay put. "Progressively I began to see more 'for sale' signs in our community," he recalls. "We became a transient community."

The problem reached such acute levels in 2007 that Fouther devoted a significant portion of the church's annual black history celebration to educating parishioners on how to avoid foreclosure. He invited scrupulous lenders to make presentations on responsible borrowing. Realtors attended to offer advice on market dynamics. And debt-relief counselors spoke on repairing bad credit.

Churches in more upscale parts of town are without need for such drastic measures, prompting some accusations of predatory lending to low-income or minority borrowers. Pastor Bill Calhoun of Montview Boulevard Presbyterian Church said some members have helped hurting families from poorer neighborhoods, but the crisis has yet to sting his congregation directly. Urban pastors Sam Downing of City Presbyterian Church and Hunter Beaumont of Fellowship Denver told similar stories, neither directing any special focus to foreclosure issues beyond general sermons on financial stewardship.

Fouther has broached the issue more specifically in sermons. "There's a lot of shame I've found with this thing," he explained. "Folks don't want to talk about when they get into trouble. But we see the plate offerings going down, so I get pressure from my finance board: 'Pastor, what about the stewardship here? Shouldn't everyone be tithing?'"

The shame and embarrassment associated with mortgage delinquency keeps many homeowners from seeking help. Brothers Redevelopment, a nonprofit financial counseling firm, has established a foreclosure hotline in Colorado, but only a fraction of those in trouble avail themselves of the free service.

Zach Urban, who founded the hotline and has spent the last several years studying the foreclosure crisis in Colorado and around the country, told WORLD that the emotional state of homeowners in trouble runs the gamut from thoughts of suicide to abject denial, wherein folks simply refuse to open their mail. "Marriages and relationships become worn and tattered because of the frustration and strain on a couple during this process," he said. "There's a desire to place blame on one or the other as to who got them into the loan to begin with."

The issue of blame is no simple matter. Kathi Williams, executive director of the Colorado Division of Housing, assigns a 60-40 culpability ratio to lenders and borrowers, respectively. "We did a lot of things out of greed in this last housing boom that we shouldn't have done," she said, citing no-doc loans that required no proof of income or expenses. "Lenders are crying today that people lied about their income and expenses. But they were absolutely pushing a product that allowed that abuse."

Many Colorado lenders are paying for such irresponsible practices to the tune of $30,000 to $50,000 per foreclosure. That kind of comeuppance prompts some spiritual communities to adopt a victim mentality. Pastor Harold Hicks of Mount Carmel Community Baptist Church in northeast Denver believes all of the blame should rest squarely on lenders who invented products with graduating rates. "There's a very simple answer to all this," he said. "All lenders need to do is readjust the interest rates and keep people in their homes."

But that thinking does not emanate from a vacuum. Hicks is heavily interested in the enterprise of excusing irresponsible borrowing. An investigative report in the Rocky Mountain News last summer uncovered accusations from two former Mount Carmel members that Hicks tricked them into paying inflated prices for dilapidated investment properties. When the housing bubble burst, those properties went into foreclosure and brought financial ruin to Sherri Wrightsil and Deborah Richardson, both of whom had signed falsified documents for huge loan amounts at the behest of their pastor.

Hicks has refused to comment on the matter, which has now triggered an investigation from the Denver District Attorney's office. Sharon Daniels, who has worked at Dave Smith Realty across the street from Mount Carmel for more than 40 years, scorns the pastor's actions and any notion that minimizes the need for irresponsible borrowers to alter their behavior. Daniels will not work with clients interested in anything other than 30-year or 15-year fixed loans.

That old-school approach, once thought overly restrictive and antiquated, is resurging in Denver and throughout the state. At Colorado Homeless Families, an organization housing numerous former homeowners, director Connie Zimmerman preaches the lessons of hard work, budgeting, and delayed gratification that counteract an entitlement culture and spare people from buying more than they can afford. "If people don't want to be responsible and just want to blame the world, we can't help them," she said. "But some people just have to learn the hard way."