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Foreclosure trouble, with a capital 'T'

While Elkhart has a reputation as an economic bellwether for the nation, it was Indiana that played the canary in the coalmine when it came to the foreclosure crisis.

"Indiana had a foreclosure problem for quite a while," said John Tatom, research director of the Networks Financial Institute at Indiana State University's College of Business. "… "Ohio and Indiana were leading the country back around 2000 and 2001 and what happened was the rest of the world caught up."

Why Ohio and Indiana?

"Low prices, relatively high incomes and credit availability, so a lot of people were able to qualify (for mortgages)," said Tatom. "The problem is, they're in the more volatile manufacturing sector" – meaning they're more likely than other workers to be laid off and stop making payments.

In other words, when you couple the continuing exodus of U.S. manufacturing jobs with a sharp downturn in the RV industry -- Elkhart's economic mainstay – you have trouble with a capital "T," right here in this river city.

As msnbc.com's Mike Stuckey reports today in The Elkhart Project, the worsening unemployment picture in Elkhart County is adding to the pace of foreclosures, and many real estate brokers and elected officials fear the problem will get worse before it gets better.

Elkhart Truth reporter Tim Vandenack chronicled another aspect of the crisis – the extended family domicile – in this report last week.

Tatom said that while the subprime loans propelled Indiana to the top of the foreclosure chart, the frighteningly high jobless rate in Elkhart County – 18 percent in February, and even higher in Elkhart city – unemployment is adding to the problem.

That jibes with what Amy Kennedy and her home ownership team at the LaCasa nonprofit agency are seeing in their foreclosure prevention counseling service.

"First it was subprime and now we're just seeing regular hard-working people who have lost their home," said Kennedy, who administers the program that once was mainly focused on advising and educating first-time home buyers.

Eddie Sauceda, one of two counselors now working nearly full-time on foreclosure prevention, said that his clients come from all walks of life and include the formerly affluent.

"It used to be we were dealing with adjustable mortgages and looking at payment shock when the interest rates reset," he said. "Now it's people with a wonderful FHA loan who can't make a payment, period. … I've got a couple from the Fort Wayne area, where she is a professor and he's a physician. I've got an RV plant manager who was making a six-figure income a year ago."

The spreading pool of the unemployed is obviously a big issue everywhere in this deep recession. Check out he Adversity Index, a measurement of the economic health of 381 U.S. metro areas and all 50 states developed jointly by msnbc.com and Moody's Economy, for details about your area.

And, as always, share your thoughts about what's going on in your community and what needs to be done to stop the bleeding in the comment area below.