The Rocky Mountain News reports from Colorado. "Colorado continued to lead the U.S. in the foreclosure rate in August. RealtyTrac showed 6,079 homes in Colorado are in some stage of foreclosure, more than 150 percent higher than a year ago and about 60 percent higher than July."

"Economist Tucker Hart Adams, who said there will likely be a recession in Colorado next year, in large part because of problems in the housing market, said the reports back her pessimistic viewpoint. 'I hope I am wrong,' Adams said. 'But I have never had this kind of reaction to one of my forecasts before. A lot of people are telling me that they are already seeing this in their industries.'"

"Realtor Ed Jalowsky said he is seeing more expensive homes going into foreclosure."

"Adams predicted consumers will cut spending 'substantially' by year’s end and throughout next year because their budgets are strained. Colorado ranks eighth among states in delinquent bill payments, and Colorado homeowners have the nation’s second-lowest level of equity in their homes."

"She pointed out housing sales and construction are declining while the supply of homes on the market is expanding. Housing prices, she said, will fall."

"It started two years ago. Anthony Stewart (and) his wife learned that a third child was on the way. Being self-employed, they had no health insurance. They still owe the hospital $17,000. The $17,000 landed in collections."

"Yes, they would refinance their home, pay off the hospital debt, plus bring down their credit card debt. A banker friend steered them to a mortgage broker, who told them that despite their credit woes and low credit scores, she could get them a mortgage at a rate no higher than 7 percent. Weeks passed. And the offered rate continued to climb: 7.8 percent, 8 percent and higher."

"Finally, at the closing table, the broker told them their new loan would be 10.8 percent, and adjustable."

"The mortgage on his home would climb to nearly $5,000 a month now, from the $3,000 per month he'd been paying since buying the house. 'I know, I know. But quite frankly,' he lamented, 'I really, really needed the cash. Worse, they made it sound like they were doing us a big favor by giving us this loan. It's my fault. I made a huge mistake.'"

"Now, two years later, the adjustable rate mortgage is about to adjust. He figured out the monthly loan amount likely will total no less than $7,000. There is at least $100,000 equity in the house, Anthony Stewart said, confident and insistent that he is not mentally overpricing what he still owns. 'It's there. I just can't access it,' he said."

"If only he had said 'no' when he sat at that table two years earlier, gotten up and just walked away. 'You know, I was living the American dream,' Anthony Stewart says. 'I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills. Now, I'm wiped out.'"