Multimedia Reporting (Adler-Utsler)

The poster that greets potential borrowers at the Countrywide Home Loan office, 4931 W 6th St., makes owning a home seem like a straightforward transaction. The poster advertises the possibility to “realize your dreams” through home ownership and encourages homebuyers to “downsize the down payment, not the dream house.”

Unfortunately for some less-qualified buyers, the dream ends before it can truly begin. Throughout the United States, homeowners who financed their homes with adjustable rate mortgages are feeling the consequences of interest rate hikes as their adjustable rate resets to a level as much as three percentage points higher. The result is a rise in the number of delinquent mortgage payments and foreclosures throughout the country. Jackie Freed, a consumer credit counselor for Housing and Credit Counseling Inc., said many consumers who visited her agency faced foreclosure because they were unaware of the details of their adjustable rate mortgage.

“Usually they were told by a mortgage broker that they could refinance in two years,” Freed said. “They are frustrated by the fact that it was not accurate information. They couldn’t refinance [because of bad credit] and are stuck with the loan. So they are frustrated, but they are also distraught, because it’s their home they are losing.”

Many first time homebuyers fall victim to the lure of low interest rates for the first two years of the adjustable rate mortgages without considering the rise in payments after the rate is reset two years later. As a result people delinquent in their payments are being forced to fight creditors for their homes. Lawrence residents have seen a 10-percent increase in the number of foreclosures during the past eight months according to Douglas County Sheriff records. Rising foreclosure rates in Kansas, and nationwide, can be attributed largely to mortgages given to inexperienced subprime borrowers, meaning those with low credit scores or borrowing more than $417,000.

People with credit problems are hardly the only consumers who remain uneducated about the details of their mortgages. A study by the Federal Trade Commission published in June showed that two-thirds of those with adjustable rate mortgages were not aware that a prepayment penalty would be exacted if they refinanced their loan with a different lender. Even more surprising, the study found half of homebuyers could not correctly identify the total loan amount. Freed said she saw about 10 people per week unable to pay their mortgage payment because of unexpected changes to subprime adjustable rate mortgages.

Lawrence attorney John Becker said he has witnessed the number of homeowners seeking his help to retain their homes increase by more than double in the past four years. Becker said many of his clients were misled by lenders trumpeting low rates for the first two years on adjustable rate mortgages. Most were buyers unqualified for fixed rate loans because they lacked the financial stability and credit rating required. Instead lenders offered adjustable rates that sneak up on borrowers unprepared for changes in their monthly payments.

“We call them ‘ninja’ loans,” Becker said. “Most of the buyers have no income, no job and no assets.”

Not surprisingly, statistics released on Sept. 6 by the Mortgage Bankers Association showed the percentage of Kansas homeowners with prime, low-risk, fixed-rate mortgages in the process of foreclosure at 0.66 percent, while 5.07 percent of Kansans with subprime adjustable rate mortgages were faced with repossession of their homes.

Diane Fry, a home loan consultant for Countrywide Home Loans in Lawrence, attributed this difference to consumers who borrowed more than their financial situation allowed even though bad credit and adjustable rates strained their budgets. Fry said the vast majority of those confronting the possibility of losing their homes were in trouble because they were unable to make payments once their rates reset and monthly payments rose drastically.

“A large portion is people who have challenged credits and got into really high interest rates loans they probably shouldn’t have,” Fry said. “All of those bad credit loans were one-year adjustable or three-year adjustable rates. Now that those are coming due people can’t pay them. For some, they went from a 9 percent to an 18 percent interest rate.”

Despite the increase in foreclosures in Lawrence and throughout Kansas, Fry said the market would slowly begin to even itself out. Countrywide Home Loans is no longer pushing adjustable rate loans to those ineligible for fixed rate mortgages. Instead, the company is not even funding the majority of subprime loans and is shifting focus to qualified and responsible borrowers, Fry said.

Becker and Freed agreed that foreclosure rates should eventually stabilize, but each said homebuyers would still face obstacles when acquiring a home loan. Although she tried to stay impartial, Freed said lenders must explain terms and conditions in order to avoid uninformed and unprepared homebuyers and buyers must stay educated to avoid predatory lending.

“I think that there are problems on both sides,” she said. “There are problems with lenders getting people into loans that they shouldn’t have gotten into. There are also problems because people don’t read their loan documents.”

Whether the fault lies with uneducated consumers or opportunistic lenders, foreclosures in Lawrence and across the nation have reached a point that is forcing reform from both sides of the bargaining table. The short-term result may be difficulty for those looking for subprime mortgages, but in the long run market stability should benefit both lenders and borrowers alike.

During 20 years serving breakfast and lunch to students at Central Junior High School, Dixie Workman made it her job to understand the eating habits of the students who occupied her cafeteria daily.

Although the cafeteria has moved and the menu has been altered more times than she can remember, Workman said students’ tastes remain the same after two decades. Dictated by the simple tastes of students, Workman routinely helped stock the cafeteria at Central Junior High with pizza, French fries, chicken nuggets and hamburgers. Despite meeting the fickle tastes of adolescent diners, increased health concerns in children and teens forced lawmakers to make drastic changes to the composition of school menus.

Concerned by skyrocketing rates of obesity in children and adolescents, U.S. senators passed legislation in 2004 forcing federally funded schools to alter menus to ensure that the meals served met proper nutrition guidelines. Since the beginning of the 2006-2007 year, Workman and food service employees of USD 497 and school districts across the country have begun the transition from high calorie to high nutrient-based offerings. Much to the dismay of students, the result is the disappearance of traditional favorites packed with fat and sugar in exchange for whole grains, fruits and vegetables.

“They miss their desserts,” Workman said. “Because of the wellness program, cookies are about the only thing we can have. We used to have apple crisp, strawberry shortcake, chocolate cake and stuff like that, but they can’t have any of that anymore.”

Despite their good intentions, lawmakers might have unwittingly created a whole new set of obstacles for schools to overcome. Students’ reactions to the changes have been predictable, but what legislators did not predict is the loss of $137,000 in revenue last year that is threatening USD 497 food service’s self sufficient status.

Paula Murrish, food services director for the district, said she knew revenue would be down as a result of the changes. She attributed the loss of funds to lackluster a la carte sales as well as the increased costs associated with health conscious foods. A la carte sales had previously generated as much as $1,000,000 per year in revenue for food services but fell to $484,000 last year, leaving the district in a financial deficit it might not be able to recover from.

“We will probably get to a point where we will not be self sufficient anymore,” Murrish said. “We have always been self sufficient and not had to have general fund money reimburse food services. I don’t know how long we can hold out, but we are trying.”

Food service’s budget crisis doesn’t seem likely to end anytime soon either. Even thought the district has downsized staff members from 151 to 108, become more aggressive in bidding processes for ingredients and services and raised meal prices by 10 cents, the decline in revenues continues to force administrators to make ends meet while providing flavorful foods students demand. Murrish said she believes offerings will get better as the district becomes better suited to providing the new menu items.

“We can always step it up and make it better,” Murrish said. “It’s just what kids will tolerate and what they get used to eating because I have to have meal sales to sustain my labor.”

Workman said she was not surprised by students’ unwillingness to try the new entrees and a la carte offerings made with less fat and sugar. She said students didn’t care for the baked chips and reduced fat snacks now offered, especially after having grown accustomed to the chips and sweets previously available. The culprit is no mystery to Workman and her young patrons; the flavor just isn’t what it used to be.

“The kids at first did not like them at all,” she said. “They liked their homemade cookies because they were bigger and more flavorful. They are starting to come around because some of this group doesn’t know what they are missing. It’s getting better as each year goes along but there just isn’t the flavor from before.”

Murrish said she understands students’ frustrations with the changes but also said she believes that with proper nutritional education and more time the district can begin to have a positive effect on the way its students eat at school and at home.

Without focusing on the reasons the changes are being made, the message will never get through to students, Murrish said. Although the program seems to be headed in the right direction, she said significant progress will not be made until students as well as parents are exposed to the nutritional education aspects for a considerable period of time.

“We know you have to start somewhere and hopefully after elementary kids have gone through the process [results will come],” Murrish said. “It takes time, it won’t happen overnight.”

And for Workman, one innocent comment said it all.

“I was surprised when one of the students came up and said ‘do they really think by changing your menus here it’s going to change the way we eat?’” she said. “And I thought, you know, that’s a smart child.”

For now USD 497 must be content with a slight increase in meal sales while waiting for the long-term results lawmakers hoped for when initiating the program. For students accustomed to the previous menu, true change remains a challenge.
As Workman said, only one aspect of her job remains the same; student taste buds. Regardless of the district’s efforts, those aren’t apt to change anytime soon.

People usually stop what they’re doing to stare. Housewives look up from their flower beds and immaculate lawns to catch a glimpse. Cars slow just to watch the dreadlocked rider effortlessly snake down hills throughout Lawrence. It’s not Mark Lewis’ skateboard that fascinates people. It’s the way he rides it. The flowing downhill movement defies reason, at least until you examine the board more closely.

In fact, Lewis’ ride isn’t a skateboard at all. It’s a freebord, and its six wheels allow riders to carve and slide down hills as if they were on mountain slopes rather than urban pavement.

“Freebording is basically a simulation of snowboarding,” Lewis said. “It’s like taking snowboarding to the streets. It rides just like a snowboard and that’s what made it so appealing to me in the first place.”

Lewis said the desire to snowboard year round was enough motivation to convince him to spend more than $300 on his first board in June. The concept is simple. Bindings hold the rider’s feet in place while two rotating wheels located between extra wide trucks allow riders to rotate 360 degrees. The result is the ability to control speed by cutting back and forth in wide swaths.

Learning to ride isn’t nearly as simple. Lewis said that learning to freebord was more difficult than snowboarding because the added friction provided by rough pavement maked it more physically demanding. And unlike snowboarding, freeborders face a much less forgiving landing and a steeper learning curve because rock-hard concrete punishes any mistakes.

Living in Lawrence gave him the ideal location to pursue his hobby, Lewis said.

“Lawrence is a pretty good town to ride in because there are lots of hills,” he said. “Around the campus area there are a lot of good runs, but you just have to watch out for cops.”

It’s a lesson learned from experience. Lewis said he has been stopped more than once by police officers either curious about how the board worked or determined to get him off the street. Lewis’ first run-in with police came just days after purchasing his freedbord, when he was practicing late at night at the Kansas Union parking garage.

“It was one of the first nights that I had the board and I was just trying to learn how to ride it,” Lewis said. “A parking garage is a really good place because there is a mild hill and I could take the elevator back up. Basically I was riding it for about an hour and finally a cop was sitting at the bottom when I came down one time.”

Despite being banned from riding in the garage, Lewis’ passion for freebording soon took up nearly all his free time. Marissa Nathanson, Lewis’ girlfriend, said that once freebording grabbed his interest he didn’t look back.

“He always asked me to follow him around while he rode so he wouldn’t have to walk back up the hills,” Nathanson said. “He even mapped out runs through campus and the rest of Lawrence so he would know all the hills he’s ridden. It got to the point where he was riding a couple hours almost every night.”

Little by little Lewis’ dedication began to pay off as his skills and confidence increased each time he stepped on the board. He purchased a headlamp and reflectors so he could ride at night and invested in safety equipment to deal with the speeds he was reaching on steep inclines. Lewis said the fastest he has ever ridden was between 25 and 30 miles per hour.

The key to freebording safely is the capability to maintain control on pavement the same way snowboarders do on snow — through carefully calculated turns.

“As long as the equipment is holding up I feel pretty confident because I have the freedom to turn,” Lewis said. “Every time you turn you can cut off speed and pretty much stop on a dime if you have to.”

In August, Lewis’ equipment and confidence caught up to him. While out with a friend, a smooth, spacious sidewalk near the Lied Center piqued his interest. Despite leaving his helmet, knee pads, elbow pads and wrist guards at home, Lewis decided to add another hill to his growing list.

Unfortunately, the adhesive attaching one of the two rotating wheels to the board didn’t hold up to the pressure. Lewis’ friend, Kouri Linder, was following him in his car when he noticed just how much speed he had built up. Linder said the speedometer had climbed to 20 mph before he realized something might not be right.

“He started to swerve a little bit and I could tell there was something wrong because he never really looks out of control on the board,” Linder said.

Lewis said he knew he was in trouble when he lost the ability to turn. One wheel came loose, leaving him unable to slow down or stop. He bailed immediately rather than allow the board to dictate his fall.

“It was really weird because I rolled twice and immediately popped back up on my feet,” he said. “I knew I had hurt my wrist but my head was spinning so fast that I really didn’t feel that much pain initially. My eyes were kind of blacking out and my hearing was going in and out. I was really out of it.”

But the pain eventually came. Linder said the two considered going to the hospital because they were worried Lewis might have suffered a concussion. After trying to deal with the mounting pain on his own, Lewis finally paid a visit to emergency room doctors who told him he had shattered the radius bone in his wrist.

His only option was to have surgery to place a metal plate in his wrist. Lewis said doctors told him he couldn’t lift anything more than five pounds, let alone ride, for the next two months.

In October, the doctor gave him permission to go back to riding the streets of Lawrence. The three-inch scarlet scar from surgery is a constant reminder of one costly mistake, but Lewis said he has no plans to stop doing what he loves.

“I like it too much to stop,” he said. “I don’t feel like I have to let up any. Maybe just be a little bit more careful.”

Nicole Jahnke buys food for a living. But instead of loaves of bread, she buys truckloads. Instead of bags of apples, she buys cases.

As director of food and nutrition services for Topeka, Kan., public schools, it’s Jahnke’s responsibility to make sure 15,000 breakfasts and lunches are served to students each school day. Purchasing the amount of food needed to feed USD 501 requires careful planning and budgeting to satisfy student tastes as well as federal nutritional guidelines.

Buying nutrient-rich foods like fruits, vegetables and whole grains is essential to meeting federal expectations. Unfortunately, not all school budgets are equipped to handle the menu change.

“Everything just costs more,” Jahnke said.

Jahnke said she was spending 10 percent more on fresh produce this year despite serving close to same amount as last year. Paula Murrish, USD 497 food services director in Lawrence, said she was in a similar predicament. Her department has spent 5 percent more on fruits and vegetables and increased the percentage of the food budget spent on produce to 30 percent. Both said they expected expenses to continue rising as more and more produce and whole grain items are added to menus.

The added expenses are threatening to force Jahnke, Murrish and other Kansas administrators to plan for a bottom line in the red. Unless funding is increased to meet changing costs, the only solution may be to turn to government subsidization. Jahnke and Murrish said that without budget increases their districts would almost certainly be subsidized within five years.

The problem facing school administrators is the lack of additional funding to accompany revamped menus. To stay self-sufficient directors must find further resources to compensate for mounting produce and grain prices and the cost of production.

Jahnke said the unpredictability of prices because of weather and crop quality increased the degree of difficulty of staying within a rigid budget. The balancing act is even more tenuous considering that prices for those items are anything but stable.

“I think poor crops have been a big reason for price changes,” Jahnke said. “We’ve seen fluctuations in lettuce prices because of rain. We see orange prices skyrocket because of freezes in Florida. Apple prices are outrageous right now.”

The U.S. Department of Labor’s Consumer Pricing Index statistics demonstrate just how unpredictable produce prices can be. In 2007, the range in percent change of navel orange prices was 45 percentage points. In January the index indicated prices were only 9.2 percent higher than those in the base years between 1982-1984. In September that price was almost 55 percentage points more.

Price discrepancies between whole grain and enriched grain products also contribute to budget frustrations. Vicki Hoffman, director of nutrition services for USD 259 in Wichita, Kan., said she finds the gap in price difficult to justify when buying in the quantities necessary to feed tens of thousands of students.

Hoffman said that wheat-based entrees, for example whole-grain pretzels, can cost 10 to12 cents more than their enriched counterparts. She said she thinks the school district’s desire to increase the use of whole grains in its menus has led to even more price increases.

“Manufacturers, it seems to me, take advantage of that,” she said. “Anything that has whole grains in it, the price just went up. Whether it’s a volume thing or whether it’s just because they can I’m not real sure.”

While the cost of food is especially taxing, the strain on school districts doesn’t stop at rising food prices. Nearly every aspect of transporting, preparing and serving fresh produce and whole grains is more expensive than for the preprocessed counterparts.

For Midwest school districts price increases are also a result of skyrocketing fuel costs. Districts help assume the burden that the transportation of thousands of pounds of food places on shipping companies.

The result for schools away from coastal shipping centers is even higher prices. Murrish said she had experienced an 11-12 percent markup on certain items because of the long transportation distances necessary.

The added costs don’t end once the food arrives. Murrish said that although she would like to provide even more healthy options, she is limited not only by price but the additional labor needed to prepare thousands of servings of fruits and vegetables daily.

Murrish is far from being able to hire more staff. In fact, she was forced to take the opposite approach to meet her $5 million budget. USD 497 downsized its labor force from 151 to 108 employees, restricting the amount of preparation Murrish’s staff can undertake. Without the additional help, Murrish said the process needed to prepare fresh produce and healthy entrees was nearly impossible on an overstretched budget.

“It’s expensive to do stir-fry and cook your vegetables and do all the labor processing of fruits and vegetables,” Murrish said. “We would much rather clean our broccoli or make our own coleslaw, but it’s just prohibitive when it comes to the amount of time it takes.”

Hoffman said the problem was even more pronounced in large districts. Hoffman and her staff serve between 34,000 and 40,000 meals per day. Even though USD 259 uses huge facilities and automated machinery, the job remains overwhelming.

“Because of the number of meals we serve even the production costs more," she said. "When we have orange wedges on the elementary menu it takes three days for the kitchen to cut orange wedges.”

Despite the cost of providing students with healthy alternatives to traditional cafeteria fare, budget crunches in school districts are forcing them to consider a future reliant on subsidized funds. The rise in prices of food and fuel seem unlikely to reverse.

For Jahnke and Murrish, the only solution is more money. Jahnke said that if her budget rose by a minimum of 3 percent every year she might have a chance at avoiding subsidization.

Murrish was less optimistic. She said she could last the rest of this year but would need significant funding increases to continue growing the program the district is committed to developing in Lawrence schools.

Luckily for Murrish, USD 497 is devoted to changing the way its students eat. Although she faces the possibility of subsidization, Murrish said the program will continue expanding even if that means losing money

“I do not see us backing down from wellness initiates,” Murrish said. “I do not see us stopping where we’ve been just so we could sell more. If anything it’s going to go the other way.”