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More than 200 people streamed into the auditorium at O’Farrel Junior High School in southeast San Diego for a foreclosure workshop last night, many staying past 10 p.m. The event matched up distressed homeowners with representatives from their lenders or loan servicers to discuss arranging different loan terms or grace periods so the homeowners can avoid foreclosure.

The room was on edge. Homeowners clutched numbered slips of green paper, waiting for their appointments. In the meantime, they chatted with their neighbors, swapping horror stories and laughing gloomily about hours-long phone calls that left them navigating complex automated systems only to be hung up on somewhere between here and there.

Councilman Tony Young hosted the event along with representatives of Gov. Arnold Schwarzenegger. Young said even though he monitors the rising foreclosure numbers, last night’s throng gave him a physical sense of how big the problem is.

“I’m a little overwhelmed, because you are the people that I represent,” he said last night. “We’re going to do this together.”

Once they started calling numbers, I sat down next to a La Mesa couple, Lela and James Mazzeo. They have two kids, aged 2 and 3, and they admit they were caught up in the real estate frenzy earlier this decade: They own five properties.

They’re in particular trouble on one that they poured money into rehabbing after it was left trashed by some tenants. It hasn’t sold after several months of sitting, empty.

As they told me their story, they shared some bleak analysis of their own situation and of the housing market. Their primary residence isn’t affected, they said, but their life savings are wrapped up in their other properties.

“It’s just a matter of how many we lose before we get to a place where we’re sound financially,” James Mazzeo said. “It’s been like a really long rollercoaster — just down. Just falling, falling, falling.”

Lela Mazzeo said in the past year, they’ve had several tenants with late rents and other problems. It’s exacerbating their trouble, she said.

They said when they bought their first property, they were extra careful. But with the subsequent purchases, borrowing was easy and everybody was doing it. Now James, a construction worker, and Lela, a litigation assistant, are coming to grips with a depressing reality.

Right before I left my seat by the Mazzeos to go speak with some organizers, James leaned over to me, his face grim.

“We’re fulfilling the American Dream,” he said.

KELLY BENNETT

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