The Gazette reports from Colorado. "Front lawns, driveways and foreclosures. These days, they’re a part of every Colorado Springs-area neighborhood. Against a backdrop of escalating numbers in Colorado and the nation, the Springs and El Paso County were on pace through May to approach a nearly 20-year-old record for most foreclosures in a single year."

"For the five years ending in 2006, the area saw more than double the number of foreclosures of the previous five years combined. In some parts of the city, one in five homes is in foreclosure."

"Rising foreclosure numbers, said Fred Crowley, a local economist,'certainly can’t increase prices, and probably will decrease values.'"

"The problem has been building for years and won’t go away overnight, local experts say. El Paso County tallied 1,433 foreclosures through May. That puts the county on pace to approach the 1988 record of 3,476."

"The Gazette analysis shows foreclosures can be found in almost every area, from ritzy Cedar Heights to middle-class Fountain, from rooftop-packed Briargate to sprawling eastern El Paso County."

"Among single-family neighborhoods, the highest foreclosure rate was found in an area in southeastern El Paso County. There, 20.9 percent of homes, or a little more than one in five, was in foreclosure at one time from 2002-2006."

"A separate Gazette analysis of lending practices shows subprime mortgage loans are linked to the rise in El Paso County foreclosures. Of all new mortgages in the county in 2005, only 13 percent were subprime loans, according to First American LoanPerformance."

"Yet, holders of subprime loans accounted for nearly half of all foreclosures in March, the most recent month for which there was data."

"Kathi Williams, director of the Colorado Division of Housing,...said some pockets of the state are seeing falling property values now. The end of the state’s foreclosure woes is nowhere in sight, and holders of subprime loans remain candidates for foreclosure, Williams said."

"Many homeowners with subprime loans and rising interest rates don’t have enough equity in their homes to refinance their mortgages and move into a fixed-rate loan, Williams said."

"In other cases, some subprime lenders allowed borrowers to exaggerate incomes or provide phony Social Security numbers, Williams said. When those homeowners try to refinance, they’re finding tougher borrowing regulations and can’t get a new loan, she said."

"'It will take us a while,' Williams said, 'to get all this mess cleaned up.'"

"El Paso County's mounting foreclosure problem has its roots in the national meltdown of mortgages: unscrupulous lenders making loans to borrowers with shaky credit history using loans that had little chance but to go bad."

"In El Paso County, subprime mortgages have ended up in foreclosure at more than 15 times the rate of loans to borrowers with good credit. Nearly 4 percent of subprime mortgages in the county were in foreclosure in February, compared with just 0.25 percent of loans to prime borrowers, according to LoanPerformance."

"'What happened is that we allowed people who had made little mistakes with their credit to make much larger mistakes with a mortgage,' said Wayne Bland, a board member of the Colorado Mortgage Lenders Association."

"Early in the decade, mortgage bankers began aggressively marketing subprime mortgages as a way to get people into homes, and as a way for investors who fund mortgages to get higher returns."

"Investor 'appetite for risk kept increasing,' said Bland, a longtime local mortgage banker. 'They thought they could mitigate risk by charging a higher rate, but they guessed wrong about how many would go into default.'"

"Many subprime loans made locally were marketed primarily to low- to moderate-income homeowners as a way to reduce their monthly payment by refinancing the mortgages they already had. Other borrowers used subprime loans to buy their first homes."

"At the same time, lenders loosened their borrowing requirements for these subprime loans. And in many cases, borrowers may not have understood all the terms and conditions of the loans, experts say."

"'We took loan counseling out of the equation and borrowers were shopping for mortgages just like they do for car loans; by the monthly payment,' said Robert Hutchinson, a longtime local mortgage banker."

"'There are mortgage products out there that can be a financial trap if the borrower doesn’t understand what they are getting into,' Hutchinson said."

"The median period, or midpoint, between mortgage origination and foreclosure for county loans that went into foreclosure from 2002-2006 was less than 2½ years, a period that declined during all but one of the five years in the analysis."

"Subprime borrowers 'were very clearly put into loans they couldn’t afford by the time they ended up in foreclosure,' said economist Fred Crowley. 'They were convinced to get into a mortgage they couldn’t afford, and couldn’t get out of later because they would have owed a penalty to refinance.'"

"Most subprime loans were intended to be a bridge to traditional mortgages once the borrower demonstrated a solid payment history, said Victor Pelster, owner of Springs-based Anchor Mortgage Inc., which makes subprime and traditional loans."

"'The plan was that the borrower would eventually be able to refinance into a fixed-rate prime mortgage,' Pelster said. 'Those in foreclosure probably weren’t able to refinance because their circumstances didn’t improve enough' to qualify from a prime loan."

"The subprime lending industry’s problems were compounded by a weakening housing market that made it more difficult for borrowers with delinquent loans to sell their homes, said Pat Libbey, owner of CitiLine Mortgage Co., which makes subprime and prime mortgages."

"'Once the market started cooling off, the weaknesses of these borrowers started to be exposed,' Libbey said. 'When you have a 100 percent loan, you have no vested interest if you can’t afford to make the payments. That’s especially true if you haven’t built any equity because the market is declining.'"

"Much of the blame for the subprime lending crisis belongs to mortgage brokers who put borrowers 'into loans that were not in the best interest of the client,' said Kevin Guttman, a former subprime broker who now owns Springs-based My Mortgage Co."

"'Does the borrower have the ability to repay this loan, or is it just a transaction to me and I know I’m going to get paid' whether or not the loan defaults, Guttman said."