An update from the Bakersfield Californian. "The days of instant equity are over. The real estate market's torrid pace has slackened. Interest rates are on the rise. Introductory rates for exotic loans are ending. And tens of thousands of homeowners are starting to miss mortgage payments."

"About 530 Kern County properties entered some stage of foreclosure during the first three months of 2006, according to a recent report."

"Local real estate companies are taking notice, said Phil Brown. Brown recently held a couple of workshops to help educate local agents. He said he expects foreclosures to keep climbing. 'More and more folks are going to get in trouble.'"

"The recent uptick in foreclosure rates doesn't come as a surprise for industry insiders, said Dustin Hobbs with the California Mortgage Bankers Association. 'The party has to end at some point,' Hobbs said. 'It's not catastrophic.'"

The Orange County Register. "Homeowners behind in their mortgage payments after hocking the house to pay for a major remodel or a new boat or car may be in for a rude awakening. If they previously refinanced and their lender decides to foreclose, they may not only lose their house, but the bank also may be able to go after their other financial assets including stocks, savings and their paycheck."

"A foreclosure may mean a big tax bill from the IRS and state Franchise Tax Board for any shortfall between what the bank gets for the sale of the owner's home and the value of the loan. 'This is going to become a hot topic,' predicts Bradford L. Hall, managing director of Hall & Co., CPAs in Irvine."

"Some homeowners with little of their own money in their homes may think they will do what strapped homeowners in the '90s did: turn over the keys to their lender if things get really bad and walk away."

"But Hall and other financial experts warn that things may be different this time because so many people have refinanced. The difference is the recourse loan. In California, refinanced loans, second trust deeds and home equity lines of credit are generally considered recourse loans. In these cases, a lender can file suit and go after almost any of the borrower's assets once they obtain a court judgment. 'They can literally go after everything you have,' Hall says."

From the Press Express on Inland Southern California. "With home sales slowing, builders are offering incentives..to draw potential buyers to their new communities. Builder concessions began to appear in the winter and some industry experts had predicted they would melt away in the spring, which traditionally marks a resurgence of home buying."

"But the sales decline has persisted into summer and builders are still striving to eliminate a larger inventory of unsold homes than they have seen in years."

"A consulting service for the home building industry said in the first five months of 2006, new home sales dropped almost 50 percent in San Bernardino County and more than 29 percent in Riverside County compared to the same period in 2005."

"As of May the two-county Inland region had 617 newly built homes still unsold and another 2600 homes under construction without pre-commitments from buyers. Patrick Duffy said that is about double the region's inventory of unsold homes built or under construction in May, 2005."

"At a K Hovnanian Homes condo sales office, sales consultant Sojja Cerini said incentives are very important to first-time buyers. 'You aren't selling the product. You are selling the payment,' Cerini said."

"That day, K Hovnanian was offering to pay up to $7,000 in closing costs at the Palacio De Oro condominium project where Cerini works. A $15,000 incentive package was available for a $329,000 three-bedroom condo that had just fallen out of escrow."

"Cerini said builders generally prefer offering concessions such as upgraded flooring, cabinets and granite countertops or covering homeowner association fees for a year rather than cut home prices. 'It is better for previous buyers,' she said. 'Seeing prices drop would worry them.'"

"Mike Van Daele, chairman of Van Daele Communities, said last week the Riverside builder slashed $30,000 off the price of the last 20 homes in a Menifee development. He said the company was responding to especially slow sales in southwest Riverside County caused by a loss of move-up buyers from San Diego County who have seen declines in their home equity."

"Van Daele said incentives, other than price cutting, have not proven very effective in stimulating sales. He said they can confuse home buyers who may wonder how much value there is in giveaway upgrades that builders offer."

"Roger Anderson, director of sales and marketing for Tanamera Residential Group, said builders that saw price discounts spur the sales of standing inventory also have begun lowering prices in new construction phases by about 5 percent."