Adjustable mortgage rates drive some to bankruptcy

Shumaker, 35, bought the 634 Antietam Drive house on a half-acre lot in 2000 for $76,500. A year or so later, tornado-like winds knocked trees down onto the roof. Insurance paid for the damage, and Shumaker, who does asphalt paving for a local contractor, decided to borrow more money to remodel the inside and to put in a driveway on either side of the house and a sidewalk.

He returned to the Hagerstown company that held the first mortgage and increased the loan to about $156,000, according to deed records at the courthouse. That, Shumaker recalls, increased his monthly payments from $714 to $910. Early in 2004, Shumaker called one of the lenders who had been filling his mailbox with refinancing offers. The California-based company sent a representative to the house.

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