One year into the credit crunch and mortgage meltdown, a Durham financial institution that banks on neighborhoods at risk is still doing business as usual.

How so?

Common sense, said Martin Eakes, co-founder and CEO of Self-Help, a Main Street nonprofit that has, according to its Web site, provided $5.24 billion to 60,130 homeowners, small businesses and nonprofit enterprises since it started the practice in 1984.

And it's still buying, rebuilding, selling and lending for and to just the sort of people in just the sort of places who are caught up in the sub-prime lending mess. Yet, with much of the country's banking, developing and real-estate industry in crisis, "Financially, we're doing fine," Eakes said in an interview this week.

Not that he doesn't feel depressed and keep his fingers crossed.

"So far, our borrowers are doing pretty well, but I'm anxious for them a little bit," he said; but, "I'm depressed for those communities we have helped to build up."

One of those communities is Southside, a long-depressed neighborhood between Roxboro Street and the American Tobacco Trail, just south of the Durham Freeway.

According to a February report by the Community Reinvestment Association of North Carolina, Southside had 11 foreclosures in the first 10 months of 2007. Earlier this year, neighborhood resident and organizer Ray Eurquhart said he counted 135 houses there for sale, for rent, boarded up or otherwise vacant.

Self-Help has bought more than 30 properties in Southside, among them a duplex at South and Enterprise streets that has been remodeled for a community center.

Self-Help bought the house in October 2006 for $35,000. Its tax value now is almost $92,000. More important for the neighborhood, the center is catty-corner from a convenience store neighbors say is a source of crime. Another house at the corner is about to get a Self-Help rehab job.

"Helps keep those thugs from hanging on the sidewalk," Eurquhart said.

Branching out

In Charlotte, Self-Help plans to buy in the blighted, foreclosure-hit Peachtree subdivision for a "lease-purchase" program.

Neighborhoods like Southside and Peachtree are "struggling to survive," said Evan Covington Chavez, Self-Help's real-estate development director. Foreclosures drag a community down, as vacant houses are vandalized, become drug hangouts and run down due to neglect.

"We're keeping the lights on and the grass cut," Covington Chavez said. "We have one focus, and that is to get the neighborhood stabilized."

Stable neighborhoods stabilize property values, and that helps the owners build wealth -- which is Self-Help's essential purpose.

"Charlotte is a test case for us," Eakes said. "Find vacant properties and put into them families with weak credit and let them rent for three to five years." As the tenants demonstrate they are credit-worthy and have the income to keep up mortgage payments, they can buy.

"Our little efforts won't turn this around," said Eakes, "but it may help pilot something that can be applied on a bigger scale."

Humble beginnings

Eakes and his wife, Bonnie Wright, founded the Center for Community Self-Help in 1980. At first, it offered legal and financial advice. In 1984, it changed to lending money. Eakes has operated from the trunk of his car; now he operates from a high-rise at 301 W. Main Street, has seven other offices in North Carolina and does business all over the United States.

It has a credit union, a "ventures fund" and a research branch, the Center for Responsible Lending, which predicted -- in 2006 -- that 2 million Americans were in danger of losing their homes in a subprime-loan catastrophe.

"We were savaged by the industry," Eakes said. "I wish we had been wrong."

The catastrophe began in August 2007.

"The market completely shut down," he said. Bank after bank has found itself in crisis. IndyMac Bank in California was taken over by federal regulators. Its business, Eakes said, was based on making loans without requiring proof of borrowers' incomes and good credit.

"Mortgage lenders lending money to any Tom, Dick or Harry got us into this mess," said Ken Gasch, a Durham real-estate salesman who, since October, has handled 17 transactions in Cleveland-Holloway, a depressed neighborhood that residents are trying to revive. Two were foreclosures; three others were just short of foreclosure.

"We have the largest number of foreclosures in North Carolina we've ever had," Eakes said, but other states such as California, Florida and Maryland are in much worse shape. In part, he said, that's because North Carolina enacted the first state laws to restrict "predatory lending" back in 1999.

In Durham, the market is still fairly resilient. Gasch, and Eugene Brown of Distinctive Properties, say mortgage money is available, at good rates of interest -- but lenders are now much more careful about who gets their money and what it goes to buy. Even in subprime lending, Gasch said, "good, smart, savvy people [have] done fine."

"We never got into this stupid practice of not checking," Eakes said. "Solid, boring, plain-vanilla lending -- you're going to be fine."

He's fretful, though, because Self-Help's loans go into the same neighborhoods targeted by the irresponsible lenders, whose crisis is dragging those neighborhoods down.

"We're just depressed to see families that have spent 30 years building something ... and the four or five houses around are boarded up," Eakes said. "If their neighborhoods are harmed by the abuses of subprime lending, their wealth is ... diminished. So, for that, I'm scared for the neighborhoods.

"We want our borrowers to succeed."