Tanda Moya and her daughter, Brandi, are enjoying a lovely spring day with that suburban purging ritual, the garage sale.

Traffic is light, but people seem interested in the Moyas' old clothes—though not in the neighborhood's vacant houses. Lately Tanda has seen more people moving out, especially on the north end of her subdivision, Pueblos Del Sol. She's not surprised to hear foreclosure rates continue to rise.

Santa Fe largely avoided the foreclosure firestorm that left new ghost towns across Arizona, California, Florida and beyond. But locally, foreclosures continue a slow, steady burn.

It's not a worry for Tanda and her husband, for one simple reason: "We rent," she says with a smile.

According to real estate and bank data compiled by the Federal Reserve Bank of New York, mortgage-market conditions have worsened over the last six months in every Santa Fe zip code except 87506, a wealthier north-side area.

Statewide, the share of defunct and delinquent mortgages continues to creep upward, with 9 percent of subprime loans now in foreclosure, plus 5 percent of other non-prime, or "Alt-A," loans.

The Santa Fe Association of Realtors says out of 2,080 active property listings, only 41 are bank-owned, in foreclosure or facing "short sales," in which a bank settles for less than the original value of a loan.

"They may be on the rise—but it's still so minimal compared to the rest of the country," association President Mary Schroeder says.

Of course, it doesn't feel "minimal."

Each week down at the First Judicial District Courthouse, foreclosure notices arrive by the dozen. That doesn't mean Santa Feans are getting thrown out of their homes en masse. It means they are missing mortgage payments to the point that their creditors take legal action.

In New Mexico, more than half of the homeowners who took out subprime loans and one in four Alt-A borrowers have missed at least one house payment in the last year.

One neighborhood that's been affected by this subtler measure of financial strain is Pueblos Del Sol, a 440-unit subdivision of mostly one- and two-story homes that surrounds Governor Miles Road near I-25.

Creditors sometimes name neighborhood associations in foreclosure filings against homeowners. In Pueblos Del Sol, that's been happening more and more often—once in 2007, five times in 2008 and twice already this year.

That may not sound like much, but it means banks are threatening homeowners here with foreclosures at 14 times the rate of completed foreclosures around the state. It suggests that even if people keep their homes, their $2,000-a-month mortgage payments are a burden they can no longer carry.

Why study this subdivision, as opposed to Rancho Viejo—a larger, newer development just put up for sale—or any other neighborhood? Because Pueblos Del Sol is so typical. Though slightly younger and whiter-collared than the rest of the city, it's a bubble of middle-class families living the suburban dream—two cars in the driveway, a garage packed with stuff and toys strewn around the yard. Except next door, at the empty house with the "for sale" sign, where weeds are starting to grow through cracks in the driveway.

"It's not anything that is particular to Pueblos Del Sol. It runs the gamut," Mary Ann Hale, who heads the neighborhood homeowners' association, says. "It breaks your heart. Each foreclosure is a sad story. It's not just a home—it's people, it's families."
Many neighborhood families are avoiding the worst. For example, Daniel Howell got a foreclosure notice on his $448,000 home earlier this month. Howell says his finances took a beating after he suffered two strokes but that he was able to avoid losing his home after working out an arrangement with his lenders.

Howell doesn't know the circumstances behind all the vacancies in his neighborhood. But he has noticed that homes once listed at $600,000 are now on offer for $400,000—the downside of the real estate boom.

On a cul-de-sac on Pueblo Tsankawi, Gene Verela lives next to two homes hit with foreclosures. Down the street, another house just went up for sale. For all that, Verela says the only change he's noticed has been more renters.
He keeps on with his yard work; next door, a tumbleweed rests in the doorway.