Eakes, co-founder and chief executive of Self-Help, the nonprofit community lender in Durham, has pushed to provide financing for people with low income so that they might get a slice of the American dream. And he has worked to protect them. He was one of the most vocal advocates in the 1990s of efforts to thwart predatory lenders in this state.

He foresaw problems brewing in the mortgage market. Late last year, the Center for Responsible Lending, a research group affiliated with Self-Help, published a report that said 20 percent of people with subprime loans would lose their homes in the coming years.

Staff writer Jonathan B. Cox recently talked with Eakes about the mortgage mess to get his perspective on the problems and where the nation and state are headed. An edited transcript follows.

Q. What's next?

A. Nationally, the worst of the home foreclosures is yet to come. ... The problem for these loans occurs two years after they're taken out. The loans that were made in 2006 and 2007, the music will stop and the dance will come due over the next 18 months. At that point there are between 6 [million] and 7 million families who have these ... exploding payments. When that payment jumps by 30 or 40 percent, basically all of these families will be facing crises. ... So this toxic dangerous product will have its maximum impact early and middle next year, 2008. It will get worse before it gets better.

Q. What about North Carolina?

A. Even though it's bad, it's a little better in North Carolina for two reasons. One, we put in place this predatory lending bill in 1999 to stop some of the worst lending practices, and that made North Carolina less hammered by the recent practices than it would have been otherwise. The second reason that North Carolina has not been as bad is we have not had home prices jump to the same extent upwards, which means we don't have as much fall back to earth.

In North Carolina, we're going to have 50,000 foreclosures this year. At least 50 to 60 percent will result in the homeowner losing their home; 30,000 lost homes and boarded up structures is a lot of damage in North Carolina.

Q. The state recently passed new laws to protect home buyers. One, for instance, requires lenders to verify income before approving loans. Is North Carolina a leader or laggard in tackling these issues?

A. This [General Assembly] session was an update to the original bill [to thwart predatory lending] and is being cited in Washington as a possible model for legislation at the national level.

Q. Should the government have acted sooner?

A. If I sold you a toaster and said that one in five purchasers who take this toaster home will burn their homes down, you'd ban the toaster from the marketplace. .... The dominant subprime mortgage product of the last two or three years is basically corrupt. ... You basically have a product that's going to devastate modest-income homeowner neighborhoods.

It's incredibly frustrating to me because any serious student of the mortgage market in the past two or three years would know this would happen. It was utterly predictable, and it's tragic that the policy actions were not taken by the Federal Reserve to prevent this kind of disaster from happening.

Q. Why should anybody, other than those who got the loans, care about subprime lending?

A. The real damage from a foreclosure is not just to a family that loses its home, but also to a neighborhood where the family is located. Nobody wants to live near a boarded-up vacant house. ... You have this spillover effect from foreclosures. That spillover effect is really quite deadly and causes a spiral that we have to concerned about.

Q. What about personal responsibility? Don't those who took subprime loans bear some burden?

A. The mortgage loan process is so complicated today. There is not a person in America who can honestly say they read every legal form at a home loan closing. Every borrower, if they're honest, will tell you they had to trust some adviser, whether an attorney, broker or lender to guide them through the mortgage process. ... They trusted the wrong person and got a loan unsuitable for any human being that breathes.

I'm in no way defending borrowers who lie or cheat or engage in fraud. ... But it really makes me angry when I see people blame the victim. That's just not the truth of what's going on.