A Window Into Region’s Housing Crisis

July 17 The silver 2005 Nissan Altima turns off Beverly-Rancocas Road at the McDonalds in Willingboro, cruises up Garfield Drive, turns left at Genesee Lane, and takes the second left at Grayson Circle. It rolls under the mature sycamores and maples and up the rise to No. 36.The driver is a broad-shouldered, bearded Marine veteran whose deep brown eyes scan the landscape. He surveys the slope of lawn in front of the neat brick ranch house, with its small covered porch and white front door.

Jamon Bailey winces at the For Sale sign, but he returns again and again, an unlikely ghost haunting a place that still holds his heart, a home lost in the nations devastating and ongoing foreclosure crisis.

No community in the eight-county Philadelphia region has been hit as hard as Willingboro. Since 2008, when the crisis was in full stride, 15.9 percent of its housing stock was in foreclosure, says RealtyTrac, which analyzes the data. Two terrible forces crashed into each other in Willingboro: The township, one of the original 1950s Levittowns, has among the regions largest concentrations of high-priced, exotic mortgages and of families with declining incomes.

The difficulties are far from over. The township, which reported 411 vacant homes a decade ago, now reports 700 and counting.

Before a lousy economy beat them down, the fiercely independent Bailey and his wife, Nicole, were making do. When Bailey was in the Marine Corps at Camp Pendleton, Calif., the couple moved into a tiny apartment on the base and supplemented the furniture that the previous occupant had left behind with chairs and a couch they had found in a nearby Dumpster. The Baileys lived within their means and had no debts.

Later, in Blackwood, when they were ready to make their leap into home ownership a three-bedroom, two-bathroom ranch in Willingboro they tempered their enthusiasm with a strict rule: They werent going to spend more in mortgage payments than they were paying in rent on their apartment.

Nicole Bailey, 32, picked out the house on the rise, while her husband, 33, worked as a Marine recruiter in Trenton. She laughs easily now at her first impressions: When we first got the house, I remember that feeling of it being somewhat on a hill, and I was like, This is a little prestigious.

They bought their home in January 2005 with a $166,000, conventional 30-year, 6 percent mortgage backed by the Department of Veterans Affairs. With taxes and insurance, their monthly payment was $1,450 and within their budget.

They replaced worn carpet and linoleum with floating laminate floors and renovated the kitchen, switching the original Levitt appliances for new ones. They broke through the back wall and installed sliding-glass doors so they could watch their children and the dusty-red toy poodle, Redz, play in the expansive backyard. They filled the house with their dreams. No matter what happened, they decided, they would keep the cozy rancher for future generations.

The Baileys high school sweethearts who grew up in Baltimore and daughters Nala, now 12, and Zamirah, now 7 bought in Willingboro just as the housing market peaked. They were joined by hundreds of families, many from the north, who saw Willingboros then-undervalued homes as a bargain.

But for the last few years in Willingboro, one of three visionary Levittowns where suburbia was practically invented, the American dream has been slipping away from an alarming number of families.

Daunting data

The statistics are overwhelming. About two homes a week there were lost last year in sheriffs sales, the final and most extreme event in a foreclosure. So many people are unable to avoid foreclosure, through mediation or the private sale of their homes, that Willingboro houses accounted for 20 percent of all sheriffs sales in 2010 in Burlington County.

In 2005, 209 foreclosure actions were filed against homeowners in Willingboro. In 2006, when the crisis hit, the number shot up 34 percent to 281, according to an analysis from American Foreclosures Inc., a firm that collects detailed foreclosure data.

Since 2005, about 2,400 foreclosures have been filed in the township of 12,000 homes, according to the analysis.

Between 2006 and May in Burlington County, 13,224 foreclosures were filed, according to figures compiled by the New Jersey Supreme Court. Statewide, meanwhile, the number was 241,721. Across the country, 5.6 million properties have gone into default since 2006, according to RealtyTrac, which analyzes foreclosures.

The foreclosure epidemic has knocked Willingboro to its knees. Not a single street has been spared. Every drive, road, circle, and lane has at least one foreclosure on it, according to the American Foreclosures data analysis.

At first glance, little physical evidence shows the ravages and shame the families have endured. With curving lanes whimsically named Buttercup and Peppermint, the town still looks welcoming to families hoping to move from cramped apartments in noisy cities to homes with backyards and garages, and with parks, schools, and pools within walking distance. To keep up appearances, the township, although struggling with a shrinking budget, mows the lawns and shovels the snow of empty houses.

A closer look, however, reveals drawn curtains, no curbside cans on trash day, no holiday decorations, and no bicycles left on lawns. Sometimes, housing-violation notices are taped to a front window. Most of the time, though, what pervades is that overwhelmingly empty feeling of a house that has no life left in it.

Even those not going through a foreclosure suffer the loss of net worth and the inability to sell homes at a decent price.

Homeowners in Willingboro, as in the rest of the nation, have seen the value of their property the middle class single largest personal investment decline.

By 2006, the average price of a Cape Cod or ranch in Willingboro peaked at $204,400 double the $99,043 average price in 2001. But since the high point, prices have waged a battle to the bottom. The average sales price last year was $125,457, according to an analysis of Multiple Listing Service data. With the glut of foreclosed homes, the market traps owners.

The Lopez family, in the house next to the old Bailey home, wanted to sell before daughter Naomi, now 5, went into elementary school. But after nine showings and no reasonable offers, they took the house off the market, said Racquel Lopez, a news anchor for a regional radio station.

The market was saturated with over 270 homes, said Lopez. There was stiff competition from the foreclosures. Buyers have the pick of the litter. So the young family will stay put a little longer.

Influx from the north

Once foreclosures move through the market, real estate agents say, prices will climb again.

Until then, the banks want to get rid of the foreclosed homes because they lose money on them. Payments are not made on foreclosed loans for about 18 months, according to the LPS Applied Analytics Mortgage Monitor report.

Thats 18 months of having a loan that no one is making payments on. Nobody is paying real estate taxes or insurance. And the bank has to make those payments even though we dont own the property, said Vito Pantilione, chief executive officer of Parke Bancorp Inc., a commercial and residential lender in Washington Township. It really hurts the banking industry.

Pantilione said his bank was faring well because it insisted that borrowers put down 20 percent deposits, didnt sell exotic mortgages, and checked applicants credit.

Other banks offered easy mortgages, which attracted families from North Jersey and New York.

They felt this was probably the only time they would get to own, said Martha Boyer, owner of Imani Realty in Willingboro.

Many renters bought homes they couldnt afford, often with no money down. If one mortgage didnt cover costs, theyd get a second.

At the height of the real estate frenzy, half the 2,700 first and second mortgages written on Willingboro homes in 2005 were high-cost, adjustable-rate loans to consumers, according to an analysis of federal mortgage data. Once the balloon payments came due or interest rates jumped 3 percentage points, 5 percentage points, or more, those homes were no longer affordable. Add on a souring economy in which people lost jobs or had their pay cut or suffered health problems or divorced, and many homes became impossible to hold on to.

Looking back, Boyer said she had begun to notice the troubles brewing as early as 2004.

Thats when a lot of those subprime programs were introduced, she recalled. A lot of people were moving from North Jersey during that time. They could get a four-bedroom for about $180,000 [in Willingboro] and were looking at homes [in the New York area] in the $300,000-to-$400,000 range or even higher.

In 2005, Judy Georges, from the Bronx, N.Y., joined the flock flying south. Once she and her husband saw the quality of the homes and the prices, we did a backflip. We were like, Wow.

They looked at two dozen homes over four weekends until they found one on Marchmont Lane for $209,000. Her brother-in-law bought two houses himself.

Georges is having no trouble with her mortgage and is free to enjoy suburban life.

Its nice and quiet, she said. When people nearby complain about the crime rate, she just chuckles: I come from New York.

Those tree-lined streets, that suburban lifestyle, the too-easy loans, and the bargain prices all combined to give Willingboro a massive turnover of housing stock and set it up for the crisis.

Home sales surged from the historical rate of about 300 a year to about 900. Between 2004 and 2007, almost 3,100 homes changed hands, according to an analysis of county property records.

Community of change

Willingboro is used to convulsive influxes of residents. When William J. Levitt started building his middle-class utopia on the northern bank of the Rancocas Creek in the late 1950s, the most recent U.S. Census had reported only 852 people living in the town. That changed fast. Families from Philadelphia, Camden, and other cities were drawn by the new notion of living in free-standing homes with 10 neighborhoods clustered around 10 schools and 10 swimming pools. And because Levitt mass-produced only three models, the original homes were affordable, $11,990 to $14,500.

By 1960, 11,861 people lived in the township, which kept growing, peaking at 43,386 in 1970. Mostly white and working-class, the town seemed to find its rhythm.

Change came again in the 1980s as African Americans moved there in large numbers. Many white residents fled. Now, of its 35,000 people, 24,400 are black and 7,500 are white, according to the latest census.

Sometime around 2008, Deputy Mayor Jackie Jennings remembers, the list of foreclosures in town took my breath away.

The recession was leaving its mark on Willingboro. Median household incomes there dropped from $78,000 in 2000 to $65,000 in 2009, according to the U.S. Census American Community Survey data, the latest available. The poverty level rose from 6 percent a decade ago to 9 percent. Unemployment in Willingboro averaged 11.2 percent between 2005 and 2009, according to the survey. Meanwhile, New Jerseys average unemployment rate was half that, 5.6 percent, according to state Department of Labor and Workforce Development statistics.

Throughout the country, unemployment among African Americans is about twice as high as that among white residents, according to the nonpartisan Economic Policy Institute.

The middle class is not on the same solid footing that it once was, said Jennifer Wheary, who cowrote a study on the recessions impact on middle-class African Americans and Latinos with Brandeis University and the New York think tank Demos.

In the prerecession years of 2000 to 2006, middle-class workers earned less, saved less, and borrowed more than they did in the 1990s. They watched benefits packages shrink. College costs went up, and parents took loans or dipped into retirement savings to help their children. All these factors left them with little protection against the economic storm of 2007.

A generation of progress has really been erased, Wheary said. People who had little ground to lose lost it all.

At the Burlington County Community Action Program in Willingboro, director Silas Townsend said that around 2009, he had noticed a change in his antipoverty agencys clientele. Added to the poor and working poor were an increasing number of distressed middle-class families looking for help with pending foreclosures. The agency was used to getting about 50 people a year seeking mortgage help. In 2009, that number leaped to 50 a month. Most of the time, he said, people were in trouble because they had lost a job.

The town has not fared well, either. Because of a weak economy, cuts in state aid, and a fatigued tax base, the township lost 20 workers to attrition in the last three years, with no hope of hiring replacements. Two police supervisors retired rather than face layoffs, and a handful of clerical workers was let go. The library laid off 10 employees and cut back its hours. The townships second post office was shuttered. For the last two years, there were no fireworks July Fourth.

Were trying very hard to keep the services up, said Township Manager Joanne Diggs. But its getting harder.

A deepening hole

For the Baileys, life got hard even before the real estate bubble burst.

Jamon Bailey left the Marine Corps in January 2005 after eight years of service and went to Burlington County College to study psychology. But he could not find a job that paid enough to keep up with the bills. He went from earning $60,000 a year in the Marines as a sergeant and recruiter to about $15,000 by patching odd jobs together.

So the Baileys called their primary lender, GMAC, and other creditors to renegotiate loans, but got no responses.

I guess the mortgage companies werent trying to admit it at that time that there was a crisis going on, Nicole Bailey said.

The couple decided to put the house up for sale in June 2006, agreeing painfully to defer their dream of ownership. But they couldnt sell it. By then, Willingboro home values had already peaked and were sliding down.

The Baileys took out a second mortgage from Wachovia Bank in November 2006, hoping for a reprieve until they found better jobs.

It sustained us for a little bit, Nicole Bailey recalled. But, of course, it didnt do what we needed. We still needed income.

Their monthly housing cost jumped from $1,450 to $1,800.

In the meantime, Jamon Bailey worked scheduling swimming classes at Burlington County College, substitute-teaching at Living Faith Christian Academy in Pennsauken, and serving business customers at FedEx. His wife commuted two hours back and forth to work as a provider servicer at Aetna in Blue Bell. When she was in the final months of her pregnancy with their third child, Ethan, now 3, she ran a day-care center out of their home.

They had already taken their older daughter out of Living Faith Christian Academy, as did many other parents squeezed by the recession. The school closed in 2010.

The Baileys learned the art of the yard sale. They sold beds and clothing. They sold their second car, an old Chevy Cavalier.

We were selling everything, Nicole Bailey said. We would sell our eyebrows if we could.

The Baileys were living on such a tight budget that by Christmas 2007, they decided to go without gifts or even a tree. It was a very humbling three years, she recalled.

During that time, they went on Medicaid for the children, accepted gifts and money from family and friends, worked, and looked for more work. In spring 2008, the water was shut off. Nicole Bailey took the children to the library during the day so they could use the bathroom. At night, when no one could see him, her husband went to Mill Creek Park and filled a cooler with water so they could flush the toilet.

By 2009, local foreclosure-crisis counselors were so backlogged, the family couldnt get an appointment. So the Baileys drove two hours to Millville in rural Cumberland County to the nonprofit mortgage-crisis agency AHome. There, they worked through mounds of paperwork to negotiate with GMAC.

They left Willingboro in September 2009 and moved into a small clapboard twin in Medford, which they rent.

It was very emotional. The kids didnt want to leave. Theyd made friends. It wasnt easy to digest, Nicole Bailey recalled. And they had to give up Redz because the landlord didnt want dogs. Redz now lives with Jamon Baileys mother in Baltimore.

But even after they left, he returned to mow the lawn, prune the shrubs.

It was ours, he said. You just take pride. It was one of the things that belonged to us. We wouldnt leave something in worse condition than when we got there. It wasnt the right thing to do.

The house went to sheriffs sale in January 2010, and the For Sale sign sat on the sloping lawn until August, when a buyer paid $127,900 $38,100 less than the Baileys had paid five years earlier.

The Baileys are still paying off the second mortgage. Their only other debt is a $250-a-month payment on their 2005 Nissan.

Despite their ordeal, they still dream about their future. He has his associate degree from Burlington County College and works as an information-technology expert for a military contractor at Joint Base McGuire-Dix-Lakehurst. And he is finishing up a bachelors degree on the Web at Regent University in Virginia Beach, Va.

The family plans to move back to Maryland. Jamon Bailey wants to be a counselor and a minister.

Though theyve gotten past those painful years, the Baileys predicament still embarrasses them, and they declined to be photographed.

They still want to own a home. But theyll save up for it. Maybe buy the land first, design the house. They say they dont want another mortgage ever again.

An interactive map of Willingboro foreclosures plus videos of residents discussing the crisis are at www.philly.com/wboro

at 215-854-2652 or cburton@phillynews.com.

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