by Tanta on 5/02/2008 07:32:00 AM

You all know I've been looking for evidence of this trend. And reader P.C. sent me a doozy.

Next up is 5015 Meadowlark Court in the Foxwood Forest neighborhood in northern Albemarle County. Here, the owner owes $500,000 on the first deed of trust. But this time there are two additional liens on the property-- $150,000 on a second deed of trust and $75,000 on a third note, a credit line, according to Albemarle County records. . . .

Lenders have allowed the owner to pile more than $725,000 in debt on a property assessed by the county at only $691,200. But the real shocker is the owner's vocation: he's Chris Prang, a mortgage broker.

"It was really bad timing for us," says Prang. "We had bought a house a Wintergreen and dumped a lot money in it. Then there was the news about mortgages--" news that affected Prang's own business.

Prang works out of his house for Carteret Mortgage; he says his mortgage consulting is geared toward the Christian community and home schoolers, which is what his wife does with their three children.

"I try to do things above-board," says Prang.

Their original loan was with American Home Mortgage, the once high-flying firm that flamed out last August with a sudden bankruptcy and put about 7,000 Americans out of work. Then things went bad for the Prangs after they used their equity-- or what they thought was their equity-- to finance another business venture: buying houses and fixing them up.

"I had another foreclosure," Prang admits. "I had perfect credit until recently."

He advises homeowners in over their heads to avoid late payments, but he admits that's easier said than done. He suggests that people unable to keep up with their payments try something called a "deed in lieu of foreclosure," in which, with approval, they simply give the house back to the bank.

"It's not as harmful to your credit as a foreclosure," he says, but concedes, "I'm in the business, and I didn't know about it." . . .

Prang is mortgage savvy, and yet he says, "There was nothing else I could have done."

He and his wife bought their house for $650,000 in 2005 and converted the garage to boost it to 5,000 square feet, the biggest house in the neighborhood. They listed it a year ago for $800,000, then $775,000, and finally, $699,000 a few weeks ago, less than what they owe on the three mortgages.

"I could have come current," confesses Prang. "I have the money. But that meant dumping a lot of money in a house losing value."

And he says if he had sufficient funds, he wouldn't pour them into buying a house now. "Why take the chance to buy something that a year from now could be worth a lot less?"

Prang isn't in favor of current plans for the government to bail people out of bad investments. He personally didn't want government help in avoiding foreclosure.

"In the long run, I'm going to be okay," he says. "I know my credit has been dinged, but I know how to repair it."

Those of you with that sort of sense of humor might be interested in Carteret Mortgage's website. I enjoyed the tagline on the bottom of each page:

"He who walks with integrity, walks securely. He who perverts his ways, will become known." -Proverbs 10:9