THE QUINTESSENTIAL California girl, my friend "Nancy" is a gregarious woman with a wicked sense of humor and a perpetual tan. She's lived here her whole life. But as a single mom who is just barely making ends meet, she is losing sight of the California Dream. And now she's close to losing her home.

Nancy's plight exemplifies what has gone terribly wrong with our economy: she signed a mortgage contract she couldn't afford and she's gone into default. She hasn't made a payment in three months. And she's just one of thousands nationwide. These defaults set up a series of bank failures that have rocked the global financial system.

According to a local real estate source, Ventura now has 322 properties listed for sale. Of those, 55 are now owned by banks through foreclosures and 66 are "short sales," in other words, the asking price is less than the balance the owners owe. Ventura is No. 2 in the county, behind Oxnard, in the percentage of such homes on the market citywide.

Nancy refinanced her mortgage a little over a year ago. She thought she had signed a mortgage contract with terms offering her a fixed rate for five years. But after just eight months, she received notice that her mortgage payment had gone from $1,700 to $3,800. She can't pay it.

"My principal balance went up so high I owe more than what my house is worth. Every time I make the minimum payment I end up $1,000 in the hole," she said.

Three years ago her house was worth $600,000; now it's worth $400,000, she said.

HER MORTGAGE BROKER may take issue with her claims of being completely misled, but it's clear Nancy did not understand what she was signing and should not have been approved for the adjustable rate mortgage she was unknowingly saddled with. "They don't explain things well," she said with a sigh.

Nancy has put a lot of work into her East Ventura home and doesn't want to lose it. Recently she went back to her lender and begged for mercy. "He said, 'We're going to try to get you a fixed loan you can afford.'

"But that was 12 days ago..."

Would more government oversight on the lending industry have helped my friend? Perhaps. But it's clear the free-wheeling days of risky lending are over.

On a related note: at top is a preview of a new commercial from the Hannah-Beth Jackson campaign that was filmed in Ventura in front of a bank-owned home.