Thomas Geer Sr. sipped iced tea Wednesday at a pizza parlor in Ledyard and explained how he went from owning a home free and clear to being at risk of losing it.

It wasn't the two divorces or the theft of savings by a relative that led to the posting of a big foreclosure sign on his 1947, four-bedroom house on Col. Ledyard Road. Rather, he said, it was the injuries that put him and his son out of work that led them to miss four payments on an $80,000 home equity loan.

Since 2003, the number of legal housing claims that trigger the foreclosure process has been inching higher in New London and Windham counties, according to The Warren Group, an independent real estate and financial information service in Boston.

Connecticut's Superior Court system also tracks foreclosures. Over the past two fiscal years, foreclosures increased to 81 from 76 in New London County, and to 95 from 60 in Windham County.

Causes for the slight uptick are two-fold, said Terry Egan, editor-in-chief of the company's periodical, The Commercial Record. Rising interest rates are increasing the cost of long-term borrowing, and a softening real estate market is leading buyers to be choosy as inflated home prices descend slowly and more people try to sell at the same time.

Unlike many other regions and states across the country, however, southeastern Connecticut's economy remains diversified and healthy, Egan said. Savvy Northeast borrowers tend to avoid the trap of "exotic" adjustable rate loans with artificially low mortgage payments that balloon a few years later, he noted.

"It's not gotten to the point where foreclosures lead to fire sales and discounts, " he said. The increase in troubled propertiesdoes, however, "drag down the real estate market. Banks take a hit. The last thing banks want to do is be sitting on real estate."

Foreclosures peak when the economy takes a beating, Egan explained, citing years like 2002, when the stock market plunged following the Sept. 11 attacks.

In that year, 1,001 properties were on the brink of foreclosure in New London County, 469 in Windham County, and 13,012 across the state. That year ranks as one of the most troubled in the past two decades, according to Warren Group data.

The signs of climbing numbers of foreclosures that southeastern Connecticut is seeing now are not necessarily a precursor to recession, said Egan, "but it's on everyone's mind. If the housing market continues to slump, it's going to be a drag on the economy."

If a homeowner has trouble making payments but has a fair amount of equity in the house, the solution in a seller's market would be to sell quickly at top value, Egan said. Yet, between July of 2005 and this past July, single-family home prices rose only half of a percent. The slow appreciation in value makes it hard for homeowners to find a "quick and easy way out," he added.

The predicament for homeowners caught with too little cash might have started, he said, whenthey were lured by a hot real estate market and the stability that privately owned real estate can provide. "A lot of people" at times like that, Egan said, "stretch to become home-buyers."

Then, high energy and utility costs might wreak havoc with the household budget, and illness, divorce, death or job loss can put people in a financial hole they can't climb out of, he said.

"Because of Pfizer, Electric Boat, the casinos, we have a more stable market," said Hughes Griffis, a real estate attorney with Waller, Smith & Palmer, PC in New London. "We don't have the ups and downs that other labor markets do. The people with mortgages are going to keep paying whether they got a job or got laid off. They've got savings. They work part time."

Griffis is chairman of the Bank Bar Committee of Southeastern Connecticut and general counsel for the Eastern Connecticut Association of Realtors.

Some banks are offering 50-year mortgages in which the buyers are making such small monthly payments that they are not investing in the home's equity, Langhammer said.

"By jiggling the numbers, (a buyer) can be qualified on paper for a mortgage. But one, two, three, four, years down the pike, these people will probably be foreclosed on," he said.

Three days before the foreclosure on his Ledyard home, which was set for Saturday, 55-year-old Geer, who is disabled and retired, appeared optimistic, despite what looked to be his imminent loss.

Geer assumed full ownership of the property in 2004, after sharing title of the property with one of his sons, Thomas Jr., since 1999. His mother had paid off the first mortgage before that, and his son became part-owner when Geer took out the $80,000 home equity loan about two years ago, he said.

Providence broker Scott Galsband of the Civic Mortgage Group said he has a lender willing to write a new loan to cover the one now in default, as long as a leaky furnace is repaired and passes inspection.

Many pending foreclosures don't end in foreclosure, said Alan Pasnik, Warren Group's data analyst. For instance, he noted, homeowners might sell privately at the last minute, or cancel the foreclosure but leave the lender hanging.

In New London County, the number of troubled properties placed in the foreclosure process came to 545 for the past fiscal year, which ended in July. Of that total, only 81 foreclosures were eventually recorded. For the 2004-05 fiscal year, 400 properties were put in the foreclosure process, but only 76 were finalized, according to court data.

After he ruptured his back and left Electric Boat about 24 years ago, he said, he worked in the dairy business in Texas for a while, then in Connecticut schools as a custodian. Until three years ago, when he reinjured his back, he worked part time at Super Stop & Shop and full time at Rosie's Diner in Groton. He has not worked since then, and he said he suffers from emphysema.

For some time, Thomas Jr. had taken over the loan payments. But in December, the son broke his hand and twisted his back, Geer said, and the family began missing their monthly payments.

Geer watched his monthly payments escalate from $850 to $1,050, and before long, he was in default for as much as $83,000 to Ameriquest Mortgage Securities Inc. Deutsche Bank National Trust Co. is now trustee for Ameriquest. Deustche would not negotiate with him, Geer said.

"They won't deal," Geer said of the bank holding the loan. "It's so frustrating. ... Things happen. Things happen to people. It's your home. Your home's like a breathing, living thing. It's hard to — It's hard."

Galsband of Providence said Emigrant Bank was ready to provide the loan, but Geer said Friday that the deal wasn't finalized in time to stop the auction on Saturday.

Just before noon, half a dozen people gathered in the driveway at 1045 Col. Ledyard Road. Within 10 minutes, Jim Fielding of New London, placed a top bid of $94,787. Fielding and his partner, Richard Giusti, plan through their partnership, Glasgo Road Associates, to renovate and resell the house.

"It's a good location," Fielding said. "It's a nice setting, and if we put a fair amount of money into it, it'll look much better. Hopefully, I make a nice home for somebody."

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