7-19-09

 
7-19-09
Modesto Bee
Campaign cash puts politician dead last...Michael Doyle
http://www.modbee.com/local/v-print/story/786756.html
WASHINGTON -- Mariposa Republican George Radanovich is raising money, but his campaign war chest remains smaller than that of his San Joaquin Valley colleagues, new filings show.
Radanovich reports having $124,572 in cash as of June 30. That's less than the veteran House member had on Dec. 31, and less than half the amount stockpiled by any other valley lawmaker.
Still, Radanovich's once-lackluster fund raising has picked up. He reported raising $121,029 in the past three months, twice as much as he raised between January and March.
"Congressman Radanovich has always raised what he needs to be re-elected," Radanovich's spokesman, Spencer Pederson, said Thursday, adding that "in the next quarter, we'll start ramping it up a bit."
Republican Devin Nunes of Visalia again topped the region's congressional delegation, with a reported $943,359 in cash.
Democratic Rep. Dennis Cardoza of Merced reported having $376,682, and Rep. Jim Costa, D-Fresno, had $320,058.
Democratic Rep. Jerry McNerney of Pleasanton, who toppled a powerful San Joaquin County Republican in 2006, has $519,170 available.
Lawmakers and political operatives alike carefully scrutinize the quarterly reports filed with the Federal Election Commission. The money raised, stockpiled and spent can shed light on a politician's prospects, campaign commitment and ability to deter challengers.
But the time-consuming task of raising money can interfere with other priorities, and it's not everyone's cup of tea.
For the past several fund-raising cycles, Radanovich's total has lagged behind his colleagues.
"His focus has been on doing his congressional job and on taking care of his family," Pederson said.
Radanovich's wife, Ethie, was diagnosed with ovarian cancer in January 2007 and has since undergone a series of treatments. Earlier this year, Radanovich had to miss some House votes because he and his wife were consulting with doctors at the National Institutes of Health.
Sometimes lawmakers hold special events, like the fund-raiser Cardoza held in May at the Pimlico Race Course in Maryland. Donors were also invited to a June 9 "Casino Night" reception for Cardoza at Washington's Phoenix Park Hotel, according to an invitation posted on the non-partisan politicalpartytime.org Web site. Costa hosted an "agricultural reception" last month for donors paying up to $5,000.
All of the valley members raise money through a combination of political action committees and individual contributors.
Cardoza raised 70 percent of his funds between April 1 and June 30 from PACs representing such entities as Pacific Gas and Electric Co. and Mortgage Bankers Association.
Radanovich, too, raised about 70 percent of his money from PACs, AT&T and Chevron among them.
Hill: Valley job news getting no better...David W. Hill
http://www.modbee.com/2402/v-print/story/786764.html
The housing market in the Northern San Joaquin Valley seems to be at or near the bottom, finally, according to the latest sales and home price figures.
Banks, especially the largest financial institutions, are reporting surprisingly strong second-quarter profits, an amazing turnaround given how beaten down they were.
GM and Chrysler, which had been considered by many to be too big to fail even in a toxic economy, exited bankruptcy quickly and supposedly are better prepared to take on the competition.
There's even money in the pipeline to stimulate auto sales, as well as federal dollars for building roads and other infrastructure projects.
Happy days must be here again, unless of course you're unemployed.
The sobering news for valley residents is that unemployment isn't getting any better. In fact, it's worse.
The just-released figures showed unemployment in Stanislaus County jumped up from 16.3 percent in May to 16.6 percent in June. That's nearly a return to the peak rate for the year -- 16.8 percent, hit back in April. The numbers are just as bad or worse in Merced and San Joaquin counties.
While California held steady at 11.6 percent, that's the highest unemployment rate since modern record-keeping began in the state. Nationally, the rate is 9.5 percent, but the Federal Reserve expects it to hit 10 percent later this year -- and stay there well into next year.
Still, that's a long way from the joblessness the valley is experiencing, and as long as unemployment stays at or near current levels, any significant recovery isn't likely to happen anytime soon.
Agriculture, which was credited for giving employment a boost in May, can give the region a shot in the arm for only a short period. It takes just so many people to work the fields, farms and canneries during the harvest. Once those jobs are filled, that's it. When the harvest ends, unemployment is likely to spike even higher.
It was hoped that ag could give the valley enough of a lift through the summer and into the fall to provide a bridge to a larger and stronger national recovery.
Though the Fed is predicting the U.S. economy won't contract as much as expected, it also foresees a relatively small expansion coming out the recession. It could be a while before the positive effects of a national recovery reaches folks here.
The ag-driven valley economy provides a strong foundation, but it can't provide the diversity of jobs needed to see the region through protracted and deep downturns. Efforts to attract new types of employers have had some success, but not enough to offset current conditions. It's a long, slow process.
Even with a more diversified economy, there's no guarantee things in the valley would be better. After all, manufacturers nationwide are hurting and cutting back, just as they have been locally. The shift from a manufacturing economy to more of a service economy isn't helping either. Service businesses such as restaurants aren't in hiring mode these days. Even if they were, many of those jobs are part time and don't provide the kind of income needed to spur a recovery and carry it onto solid footing. These days, people are often taking part-time jobs for survival, not so they will have disposable income.
In other recessions, the housing industry helped fuel recoveries, but that likely won't be the case this time around, at least not in the valley.
New home construction has been at a standstill for months. Even if conditions improve enough to get builders to jump back into the valley housing market, any projects they have in mind would take months to start. Besides, the valley housing market is still working through its large inventory of foreclosed properties, and more are coming.
Another problem for the valley is the state budget. UCLA's quarterly Anderson Forecast of the state economy predicted that 60,000 government positions would be eliminated as lawmakers try to reduce the state's $24.3 billion deficit. Basically, if all those jobs are cut, then there will be even fewer people with money to spend on the things businesses large and small need to sell. The report predicts elimination of those jobs will be a drag on the economy in 2010.
In the meantime, our friends and neighbors who are out of work will be the people who suffer most while awaiting a recovery.
I recently saw a friend and former colleague who came into the office. After a warm greeting and some idle chatter, I asked how he was doing.
"I really miss this place," he said. "You guys have no idea how bad it is out there."
I mistakenly replied that I did because my son, to whom I preached the value of a college education for years, is back home looking for a job after graduation. I related how frustrating that was for us as family.
"Yeah," my friend said, "but he doesn't have a mortgage."
Right, got it.
Fresno Bee
Mendota loses only bank branch...Chris Collins
http://www.fresnobee.com/local/v-print/story/1544426.html
MENDOTA -- With a staggering unemployment rate, severe water shortages and a struggling economy, the last thing this impoverished farming town needed was more bad news.
City officials learned recently that Mendota soon will lose its only bank. When it closes next month, the self-proclaimed Cantaloupe Capital will become the only incorporated city in Fresno County without a bank.
In many small communities, this would be little more than an inconvenience: Customers would drive to the nearest town or bank online.
But in Mendota, where most of the 10,000 or so residents work in the fields and few have computers or cars, losing the only bank will make life even tougher: Many will turn to check-cashing services and have to pay higher fees. Meanwhile, some worry that crime rates could rise as more people carry around cash, and that businesses will be less likely to set up shop.
One city official estimated that 60% to 70% of people in Mendota use the Westamerica bank branch in the middle of town.
Jose Garcia, a farmworker who stopped by the bank on a recent afternoon, said he will have to start stashing his money in his wallet after the bank closes. But he is worried he and others will be targeted by the groups of unemployed men who are known to jump residents and steal their cash in this largely unpoliced town.
"They'll beat you up and leave you with nothing," Garcia said in Spanish.
This isn't the first time Mendota has lost its bank. In the late 1990s, the branch shut down for about two years. Joseph Riofrio, a City Council member and the manager of Westside Grocery, said customers at that time often would pay him with damp bills that smelled funny -- a sign, he said, that they had been buried underground "in a jar or something."
If the bank closes Aug. 14 as planned, Riofrio said he expects Mendotans will return to their old habits.
"Many people are going to flat-out shut their accounts down and go back to stuffing their money under their mattresses," he said. "If someone breaks into their home or a fire happens, there goes the money."
The closure also threatens to stall any potential economic development in Mendota. Businesses are often wary of settling in a town that lacks a bank because it's a hassle to bank out of town and because it signals a weak local economy, city officials acknowledged.
The Mendota bank once was a branch of Merced-based County Bank. But that bank failed earlier this year and was sold by the federal government to San Rafael-based Westamerica.
It's unclear why Westamerica is closing the Mendota branch, though it will keep another branch eight miles away in Firebaugh.
A woman who answered the phone at the Mendota branch referred all questions to a bank representative, Robert Baker. Calls to Baker and to the bank's corporate office were not returned.
Banking experts said it is rare for small towns to lose their only branch. Even tiny San Joaquin, a town of 4,500 southeast of Mendota, has a bank.
Gabriel Gonzalez, Mendota's city manager, said he believes there is enough economic activity in town to attract another bank, but so far that has been "somewhat of a challenge."
In the meantime, there are no easy alternatives for farmworkers like Garcia, who has lived in Mendota for more than two decades. Because friends and acquaintances usually charge him about $15 for a round trip to Firebaugh, Garcia said he will use check-cashing services, which charge a fee of at least 1%.
Even those who can make the trip to Firebaugh could face challenges. Riofrio noted that it's not as acceptable to speak Spanish at the Firebaugh branch as it is in Mendota -- making it more intimidating for some farmworkers.
At the Nayarit grocery store down the street from the Mendota bank, owner Ortencia Aceves said she expects a slight uptick in her check-cashing business -- but that doesn't mean she is happy about the bank closing.
"Is that another sign that this is going to be a ghost town or what?" she asked, standing behind the counter inside her small, cramped store.
Mendota has always struggled economically and has a 39% unemployment rate this summer -- significantly higher than the last two summers. Thanks to the recession and regulatory restrictions on water supplies, the agriculture-dependent town is facing renewed concerns over whether it can survive.
"This is just one additional burden for a community like Mendota that is already in such bad shape," said LeRoy Cordova, an economic development coordinator for California Rural Legal Assistance, which advocates for low-income communities.
The closure also highlights the disparity between Mendota and Firebaugh, which is smaller but has two banks, several car dealerships and a police force.
"We get no respect," Riofrio said. "Other communities where the farmers live get two banks, but where the farmworkers live, we have zero banks."
In addition to residents, many businesses also will be affected by the bank closure. They'll either have to hire a courier or send someone to Firebaugh or Kerman to make deposits.
"It's going to be a pain in the butt," said Roger Guthrie, who owns Guthrie Petroleum in Mendota.
Riofrio's store is a payment center for Pacific Gas & Electric, as well as for a host of cell phone, cable and satellite TV companies. He has to deposit large amounts of money each day -- mostly in cash -- and an out-of-town trip with a stack of bills makes him nervous.
Ultimately, however, it will be residents who already are struggling who will be most harmed.
Savina Salas, a lifelong Mendota resident who provides 24-hour care for her disabled mother, says she will have to find someone else to do her job while she travels to the Firebaugh bank a few times each week.
"You figure that if you're from here, then you can bank here," she said. "I think it's a raw deal."  
Sacramento Bee
Editorial: Are we adding to the demise of the Delta?
http://www.sacbee.com/opinion/v-print/story/2035750.html
A new study of local waterways has made some troubling discoveries about a widely used group of pesticides and the role of homeowners and businesses in putting them there.
The findings should prompt many people in this region to reflect on their household practices. It also should lead to further scientific investigation of the role these pesticides are playing in the multifaceted crisis of the Delta.
The study, led by a UC Berkeley toxicologist and reported in Tuesday's Bee, focused on pyrethroids. These are man-made pesticides commonly used in household insecticides, lawn care products and pet sprays. Before the study, what happened to these substances after they killed unwanted pests was something of a mystery. Now it's a worry.
That's because the study discovered three things that hadn't previously been known about pyrethroids' penetration of local water systems.
It found that these pesticides, in the American River, were present in sufficient quantities to poison the tiny shrimp that are among the early links of the aquatic food chain. That may come as a surprise to many people who view the American River as more pristine than it apparently is.
The study also found the pesticides were present in all the urban runoff flowing out of regional storm drains. And pyrethroids were routinely detected in local wastewater.
Experts hastened to point out that this doesn't necessarily mean the pesticides play a key role in the devastation of the Delta ecosystem, including the decline of nine fish species ranging from the tiny Delta smelt to the giant green sturgeon. That will only be resolved by further study.
But according to a local group called Pesticide Watch, urban areas use more pesticides per acre than agricultural ones. Since we now know that one group of those pesticides is more pervasive, and harmful, than we'd recognized, the least we can do is handle the products that contain them more prudently.
That can mean a variety of things: Use less water on our lawns and driveways. Plant more native, pest-resistant plants in yards. Spray smaller quantities of these insecticides around homes. Dispose of them at household hazardous waste sites rather than pouring them down the drain.
Many residents here are already practicing such stewardship. Sadly, not enough. The pesticide study is a reminder that everything we do in this watershed has consequences for the Delta.
Stockton Record
Canal deserves study...Editorial
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20090719/A_OPINION01/907190313/-1/A_OPINION
To the surprise of absolutely no one who's been paying attention, state officials next month will start looking for possible intake sites for a peripheral canal.
This will be done by drilling a series of test holes into Delta river bottoms as part of on-going on-site analyses and surveys.
The peripheral canal, of course, is the hotly disputed idea of building a water conveyance system around the Sacramento-San Joaquin Delta. A through-the-Delta system also is being studied.
The idea is to figure out how to more efficiently send Northern California water south and to the Bay Area and at the same time enhance the health of the state's largest estuary.
Critics claim the peripheral canal is just an underhanded way to rob the north state of water in a way that will reduce flows through the Delta, thus hastening an environmental decline already under way. They claim its health can be improved only by reducing the amount of water being taken out for cities and farms.
Supporters say such a canal holds the promise of more efficient water use while increasing the health of the Delta, which is slowly being destroyed. Delta water flows can actually be increased with a peripheral canal in place, they claim.
Who is right has been debated for decades. Likely, it will be decades before it is resolved, if it can be resolved at all.
But we gain nothing - not more water supplies, not better health for the Delta - by simply arguing.
What we need is information, on-site examinations of the Delta ecosystems as well as a close examination of alternative solutions, including how to improve and maintain the fragile latticework of levees spread across the estuary.
River drilling by the state Department of Water Resources as well as ongoing surveys on private lands through which some sort of conveyance canal might run are part of those studies.
To just say no, to fight any objective engineering and scientific examination of options, is short-sighted and gets us no closer to finding a workable solution. We must base decisions about the Delta on facts, not emotional knee-jerk reactions.
San Diego Union-Tribune
Proposal to shutter some UCs hits nerve
UCSD profs' letter says not all campuses equal...James P. Sweeney
http://www3.signonsandiego.com/stories/2009/jul/19/
1n19uccuts221810-ucsd-profs-say-some-campuses-can-/?education&zIndex=134486
SACRAMENTO – As it confronts an unprecedented financial crisis, the University of California is crackling with debate over some provocative proposals – such as closing one or more campuses – outlined in a letter signed by 21 UC San Diego department heads.
The professors argue that the world's finest public university should preserve its elite, world-class research campuses – namely UCSD, UC Berkeley, UCLA and UC San Francisco – and impose proportionately deeper budget cuts on the less-renowned campuses in Merced, Riverside and Santa Cruz or, if necessary, shut them down.
They say it's time that the system acknowledge the brutal truth: Not all UC campuses are equal.
“Rather than destroying the distinctiveness and excellence at Berkeley, UCLA and UCSD by hiring temporary lecturers to do most of the teaching . . . we propose that you urge the President and Regents to acknowledge that UCSC, UCR and Merced are in substantial measure teaching institutions . . . whose funding levels and budgets should be reorganized to match that reality,” stated the letter, written by Andrew Scull, head of the UCSD sociology department.
The four-page letter went on to suggest dropping “the pretence that all campuses are equal” to support an argument “for a selective reallocation of funds to preserve excellence, not the current disastrous blunderbuss policy of even, across the board cuts.
“If that is too hard, we suggest that what ought to be done is to shut one or more of these campuses down, in whole or in part. We have suffered more than a 30 percent cut in our funding from the state, and we can thus no longer afford to be a 10-campus system . . . ”
After years of declining state support, the UC system faces an $813 million, 20 percent cut in state funding over the next year. Scull drafted his proposals after a briefing on potential cuts at UCSD.
Scull said he knew the letter would be controversial within the intensely competitive and proud UC community. So he let it cool for five days in a drawer before he began circulating it.
When it was quickly embraced by 21 of UCSD's 28 department heads, Scull incorporated some suggested changes and sent the letter to UC President Mark Yudof in mid-June.
It languished there quietly until July 8, when someone delivered a copy to the Merced Sun-Star.
The responses since have ranged from incendiary to measured indignation. However, two independent higher-education specialists said downsizing the UC system might be a good idea.
The day the letter became public, Yudof moved quickly to defuse the situation, saying it had become “particularly distressful to the faculty at other campuses.”
“Neither the closure of any campus nor a deliberate action to de-emphasize the research mission of any campus will be under consideration,” Yudof declared in a letter sent to all 10 UC chancellors.
Nonetheless, Scull said he has been bombarded with hate e-mail excoriating him for suggesting such a thing. But he has no regrets.
“It was not done lightly,” Scull said in an interview. “I felt it had to be said and I think some of it may have to be done, as hard as that is to say.”
The state accounts for just under 20 percent of the UC system's overall budget, but the state money pays most of the core expenses of campuses. With state support for the system declining sharply, and unlikely to be restored anytime soon, if ever, Scull said the university faces difficult, painful choices.
UC professors already are paid 20 percent below their peers at comparable institutions, Scull said. That disparity will widen when just-approved furloughs and pay cuts begin in September, and again next year, when the system resumes payroll deductions for the UC retirement plan.
Prominent research professors already are leaving for higher-paying jobs elsewhere, and for now, none are being replaced at UCSD. Other UC campuses also are unable to fill hundreds of faculty vacancies.
To attract similar talent in the future – talent like the researchers who helped develop California's biotech, high-tech and other industries – will cost more than the state will be willing to pay, Scull warned.
“I came here from the Ivy Leagues,” he said. “I've devoted 31 years of my career to the University of California, and I can't stand idly by and watch it be destroyed because people don't understand what a precious thing they've got. What had been built in 100 years can be destroyed in five.”
The reaction has been perhaps strongest in the Central Valley, where supporters, students and faculty at four-year-old UC Merced are particularly sensitive about the campus's junior status.
“I was incensed,” said Linda Torres, a UC Merced lecturer who expects to receive a doctorate in literature this fall from UCSD.
Torres, who is from Fresno, didn't plan to return to the valley after living for years along the coast and completing graduate school at UCSD. But she was drawn back by her family and the realization that she could be a role model and convince other local students that “maybe I can go to grad school.”
“How dare Scull and his signatories deem this campus 'less than equal?' ” Torres wrote in a column in the local paper. “Having taught at both campuses, I beg to differ.
“Not one of my students has told me they are attending the university 'because my parents want me to,' as I heard repeatedly at UCSD.”
A columnist for The Modesto Bee  dismissed Scull and the other UCSD department heads as “sun-soaked, fish-taco-eating egotists (who) want to protect themselves by picking on the weakest links.”
At UC Riverside, creative-writing major Kat Sanchez said she also was offended by the letter. Sanchez, a Redlands resident, said Riverside was the only UC campus to which she applied.
“I got a great education here, and I met amazing professors and learned things here that I don't think I would have had the opportunity to learn at UC Berkeley or wherever,” Sanchez said.
The chancellors at Santa Cruz, Riverside and Merced generally cite Yudof's statement when asked about the UCSD letter. UCSD Chancellor Marye Anne Fox couldn't be reached for comment.
Faculty members interviewed at Merced and Riverside politely disagreed with the proposals.
“Yes, we have a big threat here, but we shouldn't cut off an arm to correct the problem,” said Anthony Norman, a biochemistry professor and chairman of the Academic Senate at UC Riverside.
Norman said Riverside expects to become the next UC member of the Association of American Universities, an elite group of research universities that includes six other UC campuses.
But, as painful as closing or narrowing the mission of a UC campus might be, two higher-education experts said it's worth a serious discussion.
“Does the state really need nine or 10 world-class research institutions?” asked Steve Boilard, director of higher education for the nonpartisan Legislative Analyst's Office. “It seems very duplicative. No other state has that many publicly funded, major research institutions.
“So maybe this idea of two tiers – you have the big three or maybe four, where you focus on top researchers, and the other ones are more focused on undergraduate instruction – I'm not sure the state would suffer from that.”
Patrick Callan, president of the nonpartisan, nonprofit National Center for Public Policy and Higher Education, agreed. The state's historic level of funding for the UC system is unlikely to be restored in the foreseeable future, he warned.
“It is time for the university . . . to recognize that we are probably highly overextended at the research-and-graduate-education end,” Callan said.
“We are trying to do so much that we are likely to end up eroding the quality of the best programs we have. . . . Why do we have things like (UC) Irvine starting a law school? Have you heard anyone say California needs more lawyers?”
Washington Post
Rising unemployment accelerates foreclosure crisis...ALAN ZIBEL and TAMMY WEBBER, The Associated Press. Webber contributed to this report from Rockford, Ill. Associated Press Writer Mike Schneider in Orlando, Fla., contributed to this report...7-17-09
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/16/AR2009071602872_pf.html
WASHINGTON -- Relentlessly rising unemployment is triggering more home foreclosures, threatening the Obama administration's efforts to end the housing crisis and diminishing hopes the economy will rebound with vigor.
In past recessions, the housing industry helped get the economy back on track. Home builders ramped up production, expecting buyers to take advantage of lower prices and jump into the market. But not this time.
These days, homeowners who got fixed-rate prime mortgages because they had good credit can't make their payments because they're out of work. That means even more foreclosures and further declines in home values.
The initial surge in foreclosures in 2007 and 2008 was tied to subprime mortgages issued during the housing boom to people with shaky credit. That crisis has ebbed, but it has been replaced by more traditional foreclosures tied to the recession.
Unemployment stood at 9.5 percent in June and is expected to rise past 10 percent and well into next year. The last time the U.S. economy was mired in a recession with such high unemployment was 1981 and 1982.
But the home foreclosure rate then was less than one-fourth what it is today. Housing wasn't a drag on the economy, and when the recession ended, the boom was explosive.
No one is expecting a repeat. The real estate market is still saturated with unsold homes and homes that sell below market value because they are in or close to foreclosure.
"It just doesn't have the makings of a recovery like we saw in the early 1980s," says Wells Fargo Securities senior economist Mark Vitner, who predicts mortgage delinquencies and foreclosures won't return to normal levels for three more years.
Almost 4 percent of homeowners with a mortgage are in foreclosure, and 8 percent on top of that are at least a month behind on payments - the highest levels since the Great Depression.
Because home values have declined so dramatically, many people can't refinance. They owe far more to the bank than their properties are worth.
To combat the foreclosure crisis and help stabilize home prices, President Barack Obama launched an effort in March to help 9 million people avoid foreclosure by helping them refinance or modifying their loans to lower their payments.
But that's of no help to people who can't even afford the lower payments because they're making much less money or have lost their jobs altogether.
As of early July, about 160,000 borrowers were enrolled in three-month trials of loan modifications under the plan, according to preliminary figures from the Treasury Department.
Meanwhile, more than 1.5 million American households were threatened with losing their homes in the first six months of this year, foreclosure listing service RealtyTrac Inc. said Thursday.
Last week, Treasury Secretary Timothy Geithner and Housing Secretary Shaun Donovan outlined their frustrations in a letter to 27 mortgage companies, saying the industry needs to "devote substantially more resources to this program for it to fully succeed."
While high-level pressure on the mortgage industry could help, "There's nothing there that's going to help people who don't have jobs," said Jay Brinkmann, chief economist with the Mortgage Bankers Association.
Just ask anyone in Rockford, Ill. Over the last generation, the blue-collar city of about 157,000 northwest of Chicago has struggled to attract jobs as auto suppliers, aerospace companies and machine shops closed. Today, unemployment runs at more than 13 percent.
Robin and Thomas Lewis, who live there, once earned a combined $100,000. But he lost his job in shipping and receiving at a robotics company, and she had to close her at-home day care business. They are staring at an October deadline for foreclosure.
Their water service was cut off in February because they couldn't afford to pay the bill. Since then, they and their two teenage sons have been showering at the homes of friends and family and filling up gallon jugs of water to drink at home.
Robin Lewis, 41, found a job as a cashier at Wal-Mart and is taking night classes in hopes of becoming an accountant. Her 43-year-old husband got a job through a temp agency working as a machine operator.
"At least now we have some income coming in," Robin Lewis said.
She hopes it's enough to persuade the mortgage company to modify their 30-year fixed-rate loan. They are meeting with a housing counselor next week to work on their application for a loan modification.
Around the country, the relationship between rising unemployment and foreclosures is growing. An Associated Press analysis of more than 3,100 U.S. counties found a much stronger link between foreclosure rates and unemployment this year than in 2007.
According to April figures, some of the highest unemployment rates in the country are in California cities like Merced, Modesto and Fresno that have been struck hardest by the foreclosure crisis. In those areas, home prices have been cut in half.
Even in areas where unemployment is lower, borrowers are struggling.
Claudia Escobar, a 44-year-old single mother in Clifton, Va., lives in a cozy three-story brick town house on a tree-lined suburban street about 25 miles west of the nation's capital.
A combination of family health problems and the loss of her $50,000-a-year job at an accounting firm have made it impossible to make her $900 mortgage payment.
She has staved off foreclosure so far and hopes to land a job while her lender evaluates her application for a loan modification. Her 14-year-old son, Tommy, broke down in tears when he found out that his mother lost her job.
"That has to be the most devastating point since we lived here," she said, sobbing. "He keeps asking me every now and then if we're going to lose the house."