The end came in a blink outside the Merced County courthouse.
Only six people showed up for the foreclosure auction, Janice Pimentel and her son Nick included. By chance, the Pimentels' dairy farm was the first property offered.
The auctioneer, a young man in aviator sunglasses and blue jeans, read their address and paused for bids. When none came, the Joe T and Janice R Pimentel Dairy Farm, 21 years in the life of the family, officially became the property of its main creditor, a local lender.
"Well," Janice Pimentel said, "that's that."
The Pimentels' farm was once a fixture in California's Central Valley, which is best known as the world's fruit basket and, these days, may have with the highest concentration of foreclosures in the country. Many of the properties lost to foreclosure around here are in rural towns that are changing, perhaps forever, because of the nation's housing meltdown.
While news about the mortgage crisis often focuses on cities and booming suburbs, rural America has been hit hard, too. Research by the Housing Assistance Council, a Washington-based nonprofit organization that helps build housing in rural pockets of the country, has found that foreclosures are at least as prevalent in small towns as in cities.
"It's happening all over," said Moises Loza, HAC executive director.
The foreclosure problems in small-town America may be even more widespread than in cities. Mobile and prefab homes make up at least 15 percent of the nation's rural housing, and three-quarters of them were financed with installment or personal property loans rather than mortgage loans, according to the HAC. When the owners default, it leads to repossession rather than foreclosure, and these defaults are not included in the foreclosure data, Loza said.
Rural residents often have fewer banking institutions to choose from than city dwellers, and can fall victim to high interest rates and predatory lending practices. But precise mortgage statistics for rural areas are hard to come by, because while large banks in metropolitan areas are required under federal law to report lending activity, many small, rural financial institutions are not.
Merced is one of three adjoining counties near the top of the latest national foreclosure rankings issued by RealtyTrac, a real estate data firm. Merced County was No. 4. San Joaquin County, which includes the town of Stockton, was No. 2, and Stanislaus County, which includes Modesto, was No. 3. (No. 1 was Cape Coral-Fort Myers, Fla.)
In these three California counties in February, foreclosure proceedings were started on more than 3,100 properties and nearly 1,300 houses were repossessed, according to RealtyTrac. Foreclosure filings were made against about one in every 100 properties in the three counties, compared with one in 557 properties nationwide.
Merced County, population 246,000, underwent a housing boom over the past few years that saw developments spring up on what used to be farmland, said Rep. Dennis Cardoza, a Democrat from Merced. Now, in towns like Atwater, housing values have dropped as much as 50 percent, the congressman said.
"The impact on these small towns and cities is huge," Cardoza said. "In my district, I believe we are already in a recession."
In Merced County towns like Planada, no one needs statistics to tell them that the foreclosure crisis has hit hard here.
The landscape is filled with for-sale and foreclosure signs, vacant houses with weedy front lawns, and graffiti on boarded-up windows. The skeletons of houses where construction halted when the market went bust stand across a development where houses that sold for $400,000 just three years ago are now going begging at half the price.
Driving around depressed developments ringed by almond orchards, John Pedrozo, a Merced County supervisor who represents Planada, could not contain his distress.
"I've lived here 50 years and I've never seen anything like it," said Pedrozo, who grew up on a dairy farm. "Businesses are closing, people going bankrupt. And the empty houses are vandalized." A common problem, he said, is that on weekends, vacant, foreclosed houses are crashed for wild parties and trashed.
In small towns, even one or two foreclosed properties can have a big effect on the community, Pedrozo said. "It's not just that property values go down," he said. "But also that people lose their neighbors and their community."
Janice and Joe Pimentel, who are 52 and 58, respectively, decided to follow their families' dairy farm tradition when they bought their 25-acre property in Atwater two decades ago. Their sons, now 21 and 30, decided not to go into the business, and the Pimentels thought they would retire one day and convert the farm into an almond orchard.
How they lost their farm, once a thriving business with some 200 cows, is not a simple sub-prime mortgage story. It has to do with a drop in the price of milk, a spike in the cost of feed, some bad luck and, yes, a five-year refinance loan with an interest rate of 12 percent.
On top of their financial problems, in 2007, Joe's father developed cancer. With such a heavy personal and financial burden, the Pimentels could not give the farm the attention it required.
"At 58, I'm starting over," said Joe, who has started working for the county Department of Agriculture, setting pest traps.
The Pimentels' farm is a ghostly sight, with its empty stalls, the flapping roof on the main barn, and weeds where flowers used to grow. Soon, the Pimentels will take their pets — two horses and three dogs — to the modest house Joe's father left them, about a mile away.
The Pimentels doubt their property will ever be a family dairy farm again. Maybe a developer will grab it, Janice said, "for when housing grows again in Merced, someday."