Title records show that Ms. Hernandez and her husband bought their home in 1997 for $123,000, using nearly 100 percent borrowed money. They refinanced first in 2003, at 11.1 percent interest on $129,000. The equity loans kept coming: the balance rose to $230,000 in 2004; $323,00 in 2005; $374,000 in 2006; then, finally, $415,000, at 8.12 percent, in 2007.
But a region that thrived almost solely on development has fallen mightily. Building permits for properties valued at a record $12.5 billion were issued in Riverside and San Bernardino Counties in 2005; in 2008, the figure was $3.8 billion, according to John Husing, an economist whose expertise is Southern California.“You have to think of it like a gold-mining town in a Clint Eastwood movie,” Mr. Husing said. “Money comes to a place where there has never been any, and next there are tool stores, a saloon, a general store and so on. But the saloon doesn’t exist without the gold mine, and the gold mine here was construction.”