With the numbers rising across Jackson County, leaving homeowners with more questions than answers

Kathleen Jones has an affinity for animals, referring to herself as "Mother Goose" on her personalized license plates.

The 61-year-old Applegate resident is surrounded by geese, llamas, sheep and other livestock and pets on the 45-acre farm she's owned since 1999.

"I knew it was just right for me from the moment I stepped onto the property," said Jones, who is an animal communicator by trade.

But Jones could lose everything to foreclosure soon as a result of a high-interest, variable loan she received two years ago. Her farm is set to be auctioned in December.

"I just wanted to refinance my original loan," she said. "I wanted to take out a little equity to do some improvements."

Jones is among a skyrocketing number of Jackson County residents facing foreclosure this year as the nation's financial markets dive toward a recession. Foreclosure actions have increased 219 percent in the first nine months of 2008 compared to the same period the year before.

Jackson County now has the second-highest foreclosure rate of any county in Oregon, behind Deschutes County.

According to RealtyTrac Inc., a nationwide foreclosure tracking service, about one in every 54 housing units in Jackson County has had some kind of default action since January.

Nationwide, the foreclosure rate rose 71 percent during the summer quarter over the same quarter in 2007.

RealtyTrac Inc. and other businesses monitoring the financial crisis predict the situation is going to get far worse.

Congress and the Bush administration have approved a $700 billion bailout for banks and other lending institutions, hoping to free up credit and stabilize stock markets, but it has yet to step in to prevent widespread foreclosures.

Jones doesn't consider herself a speculator, but she, like many other Americans, took advantage of the easy credit that is now wreaking havoc on the economy.

When Jones refinanced her property, the former Realtor remembers having some misgivings about taking on a variable interest rate that started at 9.5 percent.

In the early spring, she injured both her hands, which put her temporarily out of work, and she fell behind in her mortgage payments. She made one payment in May of more than $5,000.

In June, she found a piece of paper lying in the driveway that notified her she was on the brink of foreclosure.

She obtained her original loan with Paramount Equity in Oregon two years ago, but it was quickly sold to another company, then to a third.

Jones thought she was on track to renegotiate her loan last May, but her mortgage shifted to a fourth company, Deutsche Bank.

She's facing a financial dead end that has forced her to seek legal advice in hopes of finding a solution before the December auction.

"I don't expect a free ride," she said. "I do take responsibility for my own affairs. But I feel like I'm paralyzed. I can't do anything."

She's afraid the federal government won't pay any attention to people like her.

With the $700 billion bailout, the big banks and lending institutions won't have much incentive to renegotiate these foreclosures, Jones said.

Daren Bloomquist, spokesman for RealtyTrac, said there are some limited provisions in place to help homeowners, particularly through the Federal Housing Administration. But renegotiating loans also requires the banks to agree to it, he said.

He said there have been some changes in the foreclosure market, such as banks discounting properties at auction.

When it will all shake out is anybody's guess, he said.

"I think unfortunately we still have a way to go," said Bloomquist. "We will probably see another surge at the end of the year."

Dennis Gates, a local process server, has become a fixture on the steps in front of the Jackson County Courthouse in Medford where he reads legal notices for foreclosures and performs auctions.

He said he does two to three times the business of just six months ago, reading off eight to 10 legal notices a day — sometimes as many as 14 or 15.

Most of the people who bid on houses are interested in getting the lowest price possible, he said.

"They're speculators," he said. "That's how they make their living."

He often hears comments from these speculators that a particular house would be a good buy if they wanted to move into it. But most of the buyers are more interested in properties that would make a good investment, he said.

While many foreclosures will leave Jackson County residents without a home, others will leave them without the nest egg they'd hoped for retirement.

Medford residents William and Joan Eoff had some modest retirement savings they invested from time to time, particularly in Eagle Point residential construction projects through Hometown Mortgage, a now defunct Medford company. "We did it twice before and it worked out," said 79-year-old William.

In July 2006, they invested $150,000 along with their grandson in a development on the Billings Ranch in Ashland.

They received the first three interest payments up front, which gave them some confidence that everything would be fine. "After that they wouldn't have anything to do with us," said Eoff.

About this time, home sales began to slow considerably in Jackson County. Eoff said unbeknownst to him, the mortgage company and the contractor already were having financial problems.

The Eoffs fought to get their money back. The contractor, Thurmond Construction of Central Point, has been involved in numerous legal actions in Jackson County over the past two years, court records show. A phone number listed for Mart and Barbara Thurmond no longer appeared to be working Friday and the Thurmonds could not be reached for comment.

Two years later, after hiring an attorney, going to court and appealing to their state representative, the Eoffs haven't collected a dime.

"We trusted people and they didn't live up to their agreement," said Eoff, who depends on a small Social Security check to make ends meet. "We feel like they just embezzled us."

In the meantime, the two homes they invested in went into foreclosure actions, the Eoffs said. Jackson County records indicate the properties belonged to the Thurmonds but have been resold. In one case the sale was part of a settlement in Jackson County Circuit Court.

Eoff said he no longer goes to Vansant Street in Ashland because it has been such a stressful time for him and his 76-year-old wife.

At this point, Eoff said he hasn't made up his mind what his next step will be, but he's considering finding another attorney.

"I fought for my rights all my life, and I don't give up," he said.

Heidi Schulzke, a former representative from Hometown Mortgage who worked with the elderly couple, confirmed the company closed down two months ago.

However, she said she couldn't discuss the Eoffs' situation.

Reach reporter Damian Mann at 776-4476 or dmann@mailtribune.com.