Families in financial trouble aren't the only ones falling into foreclosure.
Investors are defaulting on home loans, too.
One of them is former N.C. judge William Helms, who bought up starter homes across Charlotte's suburbs -- then stopped paying for them.
Helms gained attention as an absentee landlord in the early 1990s, when Charlotte cited him for hundreds of code violations at inner-city rentals he owned.
Helms sold those aging homes in 2000 for about $1.2 million, he says. And he turned his attention toward the suburbs.
Charlotte's starter-home subdivisions gleamed as an investment. The prices were right and upkeep was cheap since houses were new. Rent the houses out, and they would generate cash -- especially if you brought in tenants with reliable, government-assisted rent.
Later on, after houses appreciated, you could sell for a profit.
"On paper, it was the perfect business model," says Helms, 61, a Union County lawyer, who served as a Superior Court judge.
With his sister Mickie, Helms formed one of Charlotte's most active suburban investment teams.
Beginning in 1999, the pair bought more than 50 starter homes in a year, property records show. About half were in his name, half in hers. Prices ranged from about $96,000 to $140,000. Most were built by Beazer Homes or Crossman Communities, both major starter-home builders that later merged.
The Helmses bought three, six, 12 homes at a time. They invested primarily in four neighborhoods -- Brookmere, Hemby Woods, Northridge Village and Stewarts Crossing -- all of which became high-foreclosure areas.
William Helms provided the money, he says, and his sister managed the homes. Mickie Helms could not be reached for comment, despite repeated attempts by the Observer.
They filled most of their homes with renters -- often bringing in tenants with federal Section 8 rental assistance, Helms says.
Between 2001 and 2006, the government paid more than $400,000 in rent for tenants living in the homes owned by Mickie and William Helms, according to Section 8 records obtained by the Observer. The checks went to Mickie Helms' property management company, Citywide Realty Services.
But they didn't cover the entire mortgages, Helms says. And two things happened to sink their investment, he says.
Easy-credit home loans made it harder to find renters. Instead, they bought homes for little or no money down.
"I was having to feed it with more and more of my own money," he says. "There wasn't any cash flow."
At the same time, Helms began to lose his eyesight from a disease called macular degeneration -- and says he spent substantial amounts of money seeking experimental treatment.
The Helmses began selling off homes in 2003. But it was hard to find buyers as others began losing their homes and sales prices stalled.
The Helmses sold more than a dozen homes to people who would later default on their loans.
And in December 2003, the Helmses signed over deeds for 16 properties to First United Equity, an investment company run by a real estate agent named Theresa Lewis, who offered to help sell their homes.
Helms says he doesn't know details of that transaction because his sister handled it, but they hoped sales would cover their outstanding mortgages.
But Lewis didn't sell the homes. In 2005, she pleaded guilty in a mortgage fraud scheme involving properties unrelated to the Helmses' homes.
Since 2004, lenders foreclosed on at least 23 loans executed by the Helmses, property records show -- about half against William Helms, the rest against Mickie and her husband, Richard Ricozzi.
The four neighborhoods where they invested have had some 300 foreclosures, and are struggling with deteriorating conditions and crime.
Helms lost money, he says, but doesn't know how much.
"It's really nothing compared to these families who had the dream of owning a home and, as this crisis developed, had their dream turn into a nightmare."
Charlotte real estate attorney Vicki Sprouse, who closed most of the Helmses' purchases, says she's not sure why so many ended in foreclosure. William Helms put 10 percent down and the transactions were solid and routine, she says.
Sprouse was indicted last month in an unrelated mortgage fraud conspiracy. She says she's innocent and was unaware of any fraud involving the transactions at issue.
Helms says he knows nothing about Sprouse's troubles, and that he never intended to hurt any neighborhood.
"We had all good intentions as investors," he says.
