club and now she's got a $2.5 million mortgage in her name,' he said."

"There's no way to spin this into good news, investor Gary Anderson of Reno said. He wants to know how people with low credit ratings, the target for subprime lenders, are going to come up with just 5 percent, or $20,000, to buy a $400,000 starter home. And where are people with good credit going to turn when they want to refinance out of their exotic loans?"

"'The party is over and the fat lady is singing. (Federal Reserve Chairman Ben) Bernanke may lower rates, but the dollar will tank if he does,' Anderson said."

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The Star Ledger from New Jersey. "A property appraisal Michael Meehan conducted in Chester Township more than two years ago noted improvements such as a new kitchen, two new bathrooms, new plumbing and 17 new exterior windows."

"NJ Affordable Homes then used that appraisal to help one of its investors obtain a $375,000 mortgage. But there were at least two problems with Meehan's work, federal prosecutors said: He never went to Chester to visit the property, and the land was vacant."

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The Salinas Californian. "The number of foreclosures in Monterey County surged by more than 150 percent over the past year. The month of February saw 62 foreclosures in the county, a roughly 400 percent increase over the same month in 2006, which saw 12 foreclosures, according to the Monterey County Recorder's Office."

"In February, the median price for a single family home in Monterey County was $657,000 - down from $700,000 the same month last year, according to the Monterey County Association of Realtors. In north Salinas, the median price last month was $568,000, compared with $665,000 the year before."

"'Buyers have time to look around (and) take their time,' said Lucy Jensen, a Soledad-based real estate agent. 'The days of the buying frenzy are gone.'"

"Subprime lending is especially prevalent in Salinas, where the median home price is about $550,000, but the median household income is less than a 10th of that. Nationally, subprime lending accounts for about 10 percent of home loans. One local real estate agent said that figure could be as high as 70 percent in Salinas."

"'These are just foreclosures waiting to happen,' said Ariel Torres, an agent in Salinas."

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From Reuters. "Only a few weeks ago, a borrower in Southern California could qualify for 100 percent financing for a house, with no proof of income or assets. Now, the lending spigot is dry."

"'Everybody is running scared,' said Yamila Ayad, a San Diego mortgage broker. 'I have been getting these flashes across my screen: This product is going away,' she said. 'They have retracted the products.'"

+++

"It was all too easy for Jason St. Martin of Franklin to get a $600,000 loan in the summer of 2005. 'I'm a teacher. There's no way that I could have afforded a $600,000 loan for two years,' St. Martin said."

"He used the loan to commission two 'spec homes,' houses that, once built, he intended to sell at a profit. But things went wrong, and he wound up with two half-built houses in a market flooded with inventory - and $535,000 still due."

"His foreclosure process started last week."

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The Press & Argus from Michigan. "The home of recently divorced state Rep. Chris Ward is in the process of bank foreclosure. According to a legal notice, Ward and his ex-wife owe $158,292 on their home in Brighton Township. County records put the value of the property at less than $100,000."

"The Wards are not alone in Livingston County. In the first two months of this year, 138 foreclosures have been filed with the Register of Deeds. During the same period in 2006, 72 were filed. And in the same two months in 2005, only 31 were filed."

+++

"Homeowner Tom McClaughlin is familiar with foreclosures. McClaughlin refinanced his mortgage but with bad credit, his only option was a high interest loan with payments higher than his first mortgage that he couldn't afford. 'Ended up making the worst mistake of my life,' said McClaughlin."

"McClaughlin said it was something he couldn't afford but the broker falsified his income so he'd qualify. 'They did that just so I could get the loan,' he said."

"Minnesota Attorney General Lori Swanson said falsifying income is a common practice. 'In some cases brokers will make up jobs that people don't have or extra income that they really don't have,' said Swanson."

"She said some brokers don't care if homeowners default since they will sell the mortgage anyway. 'Putting people from product to product, refinancing them in order to make a commission and not really caring about what's in the best interest of the consumer,' said Swanson."

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Some housing bubble reports from Wall Street and Washington. "Pulte Homes Inc., the fourth- largest U.S. homebuilder, said the housing market is unlikely to have a quick recovery as buyers wait out the drop in prices. 'We're not projecting anything to bounce off the bottom at this point,' CFO Roger Cregg said at a UBS conference in London. 'There's been a lot of buyers that have moved to the sidelines.'"

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The Associated Press. "Financial services company National City Corp. on Wednesday said it has not been able to sell some $1.6 billion in nonconforming loans amid a downturn in the market for mortgage loans made to borrowers who do not qualify for conventional loans."

"The company has written down the fair value of those loans by $11 million through February and said further write-downs are likely."

+++

"Lawyers for investors hurt by the meltdown of mortgage lenders that cater to risky borrowers are likely to file a wave of class-action lawsuits against the lenders and possibly their auditors and bankers as well."

"'There is no question that there are lots of bells and red flags as to where were the third parties and what was their role in this,' he said. 'What about the auditors? What about the banks. These are questions that the investors that bring these cases are going to have to really work hard to figure out.'"

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"House prices could tumble 10% this year and force the United States into recession if a credit crunch taking shape in the mortgage market gathers steam, Merrill Lynch said in research notes this week."

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From Peter Schiff. "Those who believe that the subprime market is unrelated to the broader economy do not understand thatit's just that the subprime sector, being one of the most vulnerable spots, is where the problems are first surfacing."

"The bottom line is that far too many Americans, not simply those with low credit scores, have borrowed more money than they are realistically capable of repaying."

+++

"The fix now being suggested by some members of the U.S. Congress demonstrates how Washington completely misunderstands market dynamics. Washington fails to grasp that a return to traditional lending standards would precipitate a return to traditional prices, which are way below current levels."

"However, continuing to look the other way is no panacea either, as the real estate market is already in the process of collapsing under its own weight."

"It is also typical and very disingenuous for lawmakers to feign outrage and to have waited until a collapse has occurred before taking action. Had the government taken preemptive action with regard to mortgage lending, the real estate bubble never would have inflated to the degree that it has."

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The News & Observer reports from North Carolina. "Raleigh Realtor Gary Hooker already has lost three sales to first-time homebuyers since lenders this month began cracking down on easy mortgage money. But his real worry is the effect that tougher restrictions on subprime borrowing may have on the Triangle's unsteady housing market. Hooker said his clients weren't able to get mortgages because they could not meet a new requirement for a 5 percent down payment."

+++

"Robin Green is finding out just how hard. Green fell in love with a $164,000 house. Even though her credit history suffered from large medical bills and a recent bankruptcy, she was able to get a contract on the home. Then Green got a call from her mortgage broker telling her things had changed. She would need to increase her credit score substantially or come up with a 5 percent down payment."

"'I was like, 'Oh my God, I'm not going to be able to get this house,' Green said."

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"'As Florida was rocketing up in values, we had lots of investors that bought with the expectation of flipping these homes,' said Jim Sahnger, VP of Palm Beach Financial Network in Sewall's Point. 'Many of these people are now over-leveraged or they're 'upside down' - they owe more than their house is now worth.'"

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"The number of late payments in Broward County hit 983 in February, a 333 percent increase over the 227 last February, according to Realestat.com. Broward had 315 foreclosures last month, compared with 206 in February 2006."

"Last month, Palm Beach County had 733 property owners with late payments, up 382 percent over the 152 last February."

"Honey Hartman of Hollywood is facing a mortgage crunch. A huge property insurance increase this year pushed her monthly mortgage payment to $770, which exceeds her income of $643."

"She negotiated with her lender to cut some of the added costs, and her two grown children are helping her make up the rest of the shortfall. Hartman expects she'll ultimately have to sell her two-bedroom home and leave South Florida. 'I'm in dire straits,' she said."

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The St Petersburg Times. "The developers of Trump Tower Tampa learned Wednesday that they can't stop buyers from suing to get back deposits on the much-delayed condo high-rise."

"For Tom Long, the attorney arguing against Trump Tower, the ruling has significance beyond his clients. 'I think this now, frankly, opens the floodgates to others to demand their money back,' Long said. 'It's a three-year project and they're at ground zero.'"

"Long said developers, more than $3-million behind in paying contractors, may lack the money to come up with refunds."