The Sacramento Bee has this update from California. "Sam Webber had it all during the real estate boom. The former accountant bought old houses, fixed them up and resold them for more than he paid. It was a good independent living until four months ago when the bottom fell out of his game."

"Now as home prices have declined 5 percent from last year in Sacramento County, Webber is what analysts call 'upside down.' He owes banks more than his two remaining fixer-uppers are worth. He's missed mortgage payments on each. Worse, he's tied up his entire savings and previous profits in remodeling the houses."

"Webber has one last hope to avoid foreclosure, selling the houses for what he can get and persuading his bankers to accept less than he owes. 'The house in North Sacramento, I'm $305,000 into the bank, and it's worth $280,000. I'm trying to get the bank to agree to $280,000,' he said."

"Known in the real estate trade as a 'short sale,' this desperate, but practical tactic, negotiating less than a complete payoff to lenders, reappears like clockwork when real estate markets sour. Elk Grove real estate agent Derek Kirk recently counted 264 short-sale listings in El Dorado, Placer and Sacramento counties compared with fewer than 50 six months ago."

"'I made a decision to do this as my livelihood,' Webber said recently as he begins a job search. 'All my income was coming from the houses. This time it's burned me. I've tapped out every dime I have.'"

The Contra Costa Times. "By the time Janie Kent received the notice that her two-bedroom, one-bath cottage in San Leandro was going to be sold in three weeks, she was desperate. 'I was in denial, sitting in my house and didn't know what to do,' said Kent. Kent isn't alone. Hundreds of people in Alameda County will lose their homes this year; 176 already have. Thousands more will sit in their home, awaiting what they feel is the inevitable outcome."

"Home foreclosures are on the rise across the East Bay, with Alameda, Contra Costa and Solano counties all reporting data similar to the post dot-com bust years of 2000-01."

"Alan Wolf, a mortgage banking attorney said that interest-only and negative amortization loans seem to be fueling the higher default rates. 'Once those refinanced adjustables hit, it's going to be a big problem,' he said. 'This is not the bad year. Next year is going to be the bad year.'"

"San Ramon Loan consultant Ed Jeffry puts some of the blame on lenders who haven't been historically gentle with borrowers but also faults borrowers for not thinking through loan decisions. 'A lot of problems occur when people enter into a high-cost or subprime loan,' he said. 'Usually because there's no plan and no strategy.'"

The Press Democrat. "In Windsor, where homes stay on the market longer than anywhere in Sonoma County, some newer neighborhoods sport 'for sale' signs on every other block and sometimes several on the same street."

"'Price reduced' and 'price reduction' are common inducements on the signs in front. It is a scene repeated across Sonoma County, from neighborhood to neighborhood, cul-de-sac to cul-de-sac. Behind those for sale signs are sellers who have put their lives on hold as a market that stayed red hot for so long has turned cold."

"Now the market has reached a kind of psychological standoff, with sellers reluctant to accept the reality of falling prices and buyers holding onto the expectation of even deeper cuts. Some forgot that home prices could go down, as they did in Sonoma County in 1993 and 1994. That downturn lasted four years."

"'A year ago, you got away with murder. You sold a house no matter the condition,' said Sandy Geary, broker in Rohnert Park. 'Buyers have almost too much choice. I have buyers who come back and every week something is cheaper,' Geary said."

"Brett and Amy Reiter lowered the price for their Santa Rosa home nearly 4 percent to $515,000 to attract potential buyers, but they have received only one offer since putting their home on the market in March. 'When we first put it on there was a lot of interest,' Brett Reiter said. 'But no one was ready to jump on anything. It seemed like people were waiting, knowing prices would go down some.'"