Marie Martinez rode the real estate wave for a decade, buying property worth, on paper, more than $1 million.

Then she hit the rocks and lost everything.

Martinez's story mirrors those of millions of Americans caught up in the real estate frenzy that ended in one of the worst global financial meltdowns since the Great Depression.

The road to that meltdown goes through the streets of cities like Haverhill and Lawrence, where speculators and homeowners borrowed to buy homes they ultimately couldn't afford and were unable to sell.

Martinez is no "fat cat" investor. Before she lost her job, she made a modest $45,000 a year as a certified nurse's aide.

Yet, a string of lenders based far from the Merrimack Valley was willing to loan her hundreds of thousands of dollars to finance her version of the American dream.

Many of those lenders are now bankrupt, under investigation for fraud or both.

Martinez, a 54-year-old Haitian immigrant, bought her first property in Lawrence in 1998 for $129,000. She refinanced the multifamily home in Lawrence several times, taking out tens of thousands of dollars. She managed to make a six-figure profit when she sold the property five years later for nearly $370,000.

"This is what I do for a living," said Martinez, recounting her real estate deals. "I buy property and then I flip it. ... You try to make a profit."

But her eyes begin to well when she gets to the end of the tale. She is about to lose a two-family house she bought on a bucolic, tree-lined street in Haverhill where she lives with her growing family, including three sons and three grandsons. The property is being foreclosed, and she must move out by Dec. 8.

It's her second foreclosure; she lost another house in Haverhill a year ago.

Good idea gone bad

Who thought it was a good idea to lend so much money to people of limited means at terms guaranteed to sink them when the bubble inevitably burst?

The banks and mortgage companies who initiated the loans did. They weren't waiting 30 years — the typical term of a mortgage — to make money on the deal. They were selling the mortgages on the secondary market and earning their profits immediately. Then they used those earnings to make more loans.

Those who purchased the mortgages, like Merrill Lynch and Lehman Brothers, made money when they bundled similar mortgages into "mortgage-backed" securities — financial instruments similar to bonds.

At least two of Martinez's mortgages were bundled and sold to far-flung investors.

The investors earned a higher rate of return than was paid on government bonds for what they perceived was only a marginally greater risk.

The lawyers, appraisers, title insurers and inspectors who tag along with every real estate transaction also made money.

It all worked as long as home values kept rising.

But when values began falling and owners like Martinez stopped paying mortgages they could no longer afford, the banks servicing their mortgages foreclosed.

Investment houses that purchased the mortgages now had worthless assets on their books. When enough mortgages failed, the mortgage securities based on those mortgages no longer made regular payments to the investors who purchased them.

Then companies like AIG that sold insurance policies called "credit default swaps" guaranteeing those payments, had to pay them off.

Add up millions of defaulted mortgages, and you have the financial collapse that has ground the world economy to a halt and put American taxpayers on the hook for trillions in bailout dollars.

'Problem papers'

As her three grandchildren scampered about the moving bins and boxes stored on the second floor of her once-grand Victorian home on Brockton Avenue in Haverhill, Marie Martinez waved at the stack of papers documenting her real estate dealings.

"All these papers can drive you crazy," she said. "They're problem papers. They don't make you feel happy."

Indeed, the "problem papers" reveal some scary stuff.

Martinez's first real estate deal ended well. In 1998, she purchased 36 Stearns Ave. in Lawrence for $129,000. She financed it with a $96,750 primary mortgage and $25,800 secondary mortgage, both from Fleet Mortgage Corp. Both came with low interest rates around 6 percent, fixed for 30 years.

Five years later, in May 2003, she did what many did as home values were skyrocketing: She refinanced.

New Century Mortgage Corp. of Irvine, Calif., gave her a mortgage for $190,000 with an adjustable mortgage rate that would max out at 15.5 percent.

Her monthly payments would have ballooned to unaffordable levels, particularly since she was making around $20,000 a year as medical technician.

But she sold the Stearns Avenue property in July 2003 for $369,000, making about $160,000 on the deal. She used $50,000 of the profit to buy a big piece of land and a house in Haiti for other members of her family to live in.

But it's a deal she now regrets.

The house on Stearns Avenue was "beautiful" and had a big yard, she said.

"I made a big mistake by selling that house," she said. "You work hard, and your dream (of home ownership) comes true. I guess I was greedy. I tried to make a big profit."

From fortune to failure

In July 2003, Martinez used $100,000 of her profit on Stearns Avenue for a downpayment on her next purchase, a home at 303 Salem St., Haverhill, which she picked up for $332,000.

She financed the rest of that deal with a 30-year, fixed-rate mortgage for $232,000 with Nation One Mortgage Co. A 30-year mortgage with nearly one-third down seems perfectly safe and reasonable.

But in 2004, Martinez began pulling money out of the house by refinancing with adjustable-rate mortgages.

She refinanced twice that year — first with Homecomings Financial Network of Minneapolis, then with Argent Mortgage Co. of California. Her mortgage with Argent was eventually bundled as an asset-backed security by Wells Fargo Bank.

She used money from those transactions, she said, to do some repairs on the house and buy two buses that she filled with rice and other supplies and shipped to her relatives in Haiti.

As home values continued rising, she refinanced again in 2005 with First Franklin, another subprime lender from California. That mortgage was also sold and bundled for investors, with Deutsche Bank National Trust Co. acting as trustee for the asset-backed certificates.

The adjustable rate on that $451,000 mortgage was due to begin resetting this year and max out at 14 percent.

A $451,000 mortgage at 14 percent would translate into a monthly payment of $5,300 a month, or $63,600 a year — more than Martinez made in a year.

Martinez' goal was to sell the Salem Street house long before that happened.

In 2006, she put the house on the market for $525,000. Then she bought a second house, at 30 Brockton Ave. in Haverhill. First Magnus Financial of Tucson, Ariz., financed the full purchase price of $395,000.

Martinez had a buyer lined up for the Salem Street house, but the deal fell through and she was left in the untenable position of owning two homes.

Then she lost her job.

The Salem Street house was foreclosed on in 2007, and Martinez hasn't been able to make a payment on the mortgage on her Brockton Avenue home since last year. She said attempts to negotiate with the lender have been fruitless, and she's preparing to walk away from the house.

Also in trouble are the lenders who bet on Martinez and others like her. They include some of the major players in the mortgage meltdown. Among them:

New Century Mortgage Corp., which refinanced Martinez' property in Lawrence in 2003, is bankrupt and under investigation by several law enforcement agencies for dubious business practices.

Homecomings Financial Network, which refinanced Martinez's property on Salem Street in Haverhill in February 2004. Homecomings Financial is a subsidiary of ResCap, which is in turn a subsidiary of GMAC. Over the last two years, ResCap has lost $9.1 billion, dragging down GMAC, which last quarter lost $2.5 billion due in large part to defaulting mortgages.

Argent Mortgage Co., which refinanced the Salem Street house in July 2004, has been investigated in several states. In Ohio, the company was charged with targeting poor, black people with predatory, subprime loans they could not afford.

First Franklin, which gave Martinez the mortgage that could have cost her more than she made in a year, was purchased by the investment bank Merrill Lynch in 2006. It shut two years later amid mounting mortgage losses. Merrill Lynch, meanwhile, was teetering on collapse when it agreed to be purchased by Bank of America in September. Bank of America was the recipient of a $15 billion taxpayer-funded bailout.

First Magnus Financial, which financed Martinez' purchase of her Brockton Avenue home, shut its doors and declared bankruptcy in August 2007, another victim of loose lending practices.

Martinez, meanwhile, hasn't given up on her dream.

One of her sons, Ramon, recently pre-qualified for a mortgage, and together they have made a low-ball offer on another foreclosed property in Haverhill, hoping to close the deal before she has to move out in a few weeks.

She vows to keep that house, if she gets it, although she remains interested in continuing to play the real estate market.

"I might refinance it," she said, "and buy other houses."