John W. Schoen Senior producer • Profile • E-mail

POUGHKEEPSIE, N.Y. - In 2005, when Denise Bolds was looking to refinance her four-bedroom Victorian home in the Hudson Valley town of Poughkeepsie, she was intrigued by a mailing that said she'd been "pre-selected" for a loan program that could lower her monthly payments.

A single mom, Bolds lives with her 66-year-old mother and 17-year-old son, a high school senior who is headed for college. The program supposedly offered a "fixed-rate" loan with attractive terms, she said, which would help make ends meet on her salary as a social worker.

But when she got to the closing, she said, the terms had changed. The “fixed” rate of 5-3/8 percent only lasted two years, after which it could jump to nearly 12 percent, sending her monthly payments from $1,437 to more than $2,000. When she protested, she said, she was told she’d lose money she’d already put down in the application process.

After signing for the loan, she took the matter to the state banking department, which dismissed her complaint, based on the mortgage broker’s explanation that "all information was disclosed fairly and completely to the homeowner," she said.

By last summer, with college tuition bills looming and health complications that required surgery, the jump in monthly payments just wasn’t sustainable. She contacted her lender, she said, but was unable to work out more affordable terms. To avoid foreclosure, Bolds made the difficult decision to sell the house. That got her out from under the mortgage but wiped out her home equity.

“I had to make a decision: It was either (my son’s) education or the house,” she said. “I had almost seven years of equity (in my house), but I have 17 years of equity with my son. So my choice was no choice really.”

More and more homeowners face the same

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painful decision as the fallout from the housing and lending bust shows no signs of slowing. Foreclosures hit a record high in the first quarter, as did mortgage delinquencies, a sign that more foreclosures are coming.

Poughkeepsie is the county seat for Dutchess County, where one in every 442 households was at some point in the foreclosure process in April, according to RealtyTrac.com, which maintains a national a data base of foreclosure filings. That was the highest foreclosure rate in the state.

Congress continues to debate measures to help slow the pace of foreclosures, including extending hundreds of billions in refinancing from government-sponsored mortgage agencies to homeowners at risk of foreclosure as their loan payments jump to unsustainable levels. Meanwhile, state and local governments in places like Poughkeepsie are doing what they can to find solutions — like offering small loans to help tide homeowners over and offering counseling to mortgage borrowers in a financal bind. But their options are limited.

So far, Poughkeepsie’s economy has held up relatively well in the current economic slowdown. But unemployment began rising last year and has continued rising this year.

For some, it’s a sobering reminder of the devastating job losses in the early 1990s after IBM, the region’s dominant employer, slashed thousands of positions and left the region’s economy reeling.

Since then, as the county has worked to rebuild its economic base, Poughkeepsie has been rebuilding neighborhoods that were hit hard by the last housing recession.

“We have a beautiful Queen Annes' row right around the corner from us here in City Hall on Garden Street, which they completely revitalized,” said Poughkeepsie Mayor John Tyziak. “We have a lot of first-time home buyers who now live there and have strengthened that neighborhood.”

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