A housing report from New Orleans City Business. "The market has flipped upside down and buyers may soon have the upper hand, real estate professionals say. From the North Shore to the South Shore, there are more properties for sale than there is demand, the classic oversupplied market."

"September revealed the largest supply-demand gap since Katrina, with 7,398 homes for sale in southeastern Louisiana and only 1,262 sold, according to Prudential Gardner Realtors."

"Realtors have begun stressing the need for sellers to consider lowering prices. In a market where 50 to 70 homes in the same price range are up for sale, 'you better be priced competitively,' said Mary Ann Casey, broker/owner who services Lakeview, Mid-City, Uptown and Old Metairie."

"Casey said the situation calls to mind the oil industry bust of the 1980s when it took 15 to 18 months on average to sell homes in an oversupplied market. Sellers need to be educated about pricing their property correctly, she said. 'It’s a whole different marketing approach than it was pre-Katrina.'"

The Dallas Morning News. "Texas is seeing signs of a slowdown in the housing industry, but the downturn is not as sharp as in some other parts of the country, the top official of the Federal Reserve Bank of Dallas said Monday. 'We are seeing some signs of slower growth in the construction and construction-related industries,' said Richard Fisher, president of the Federal Reserve Bank of Dallas."

"'Housing permits softened in August, builders are slowing their home construction and home inventories are inching up,' he said. 'We haven’t seen what I call the coastal blues, the turndown you see in the rest of the country in housing,' he said."

The Star Telegram. "Borrowers in the Fort Worth-Arlington area are more likely to default on mortgage loans backed by government insurance than consumers in other major metropolitan areas in Texas and throughout the United States."

"As of Sept. 30, 5.5 percent of FHA loans made in Fort Worth-Arlington went into default within two years of being made, according to the Department of Housing and Urban Development. That rate compares with 3.3 percent nationwide during the same period and 4.7 percent for all of Texas. Partly as a result, some local lenders are tightening their standards."

"'It's a concern. Foreclosures in general are high in North Texas, and our numbers have gotten worse,' said Jim DuBose, president of Fort Worth-based Colonial Savings, the largest mortgage lender in the Fort Worth-Arlington area, which includes Tarrant, Hood, Parker and Wise counties."

"Colonial's FHA loans, which DuBose said represent about 3 percent of Colonial's business, defaulted at 161 percent of the Fort Worth-Arlington rate. After examining its loan portfolio, DuBose said, Colonial discovered that of about 9,400 FHA loans it made over the past five years, loans that included down-payment assistance from not-for-profit groups went into default 20 percent of the time."

"That compared with 9 percent of FHA loans without down-payment assistance over the same five years. 'So they're more than twice as likely to be delinquent. That's why we stopped doing down-payment-assistance loans,' DuBose said."

"Gary Lacefield, executive VP for compliance at Plano-based W.R. Starkey Mortgage, said that just over a year ago his employer made it a policy that if a borrower couldn't qualify for a loan at a 30-year term, he or she wouldn't qualify for a shorter-term loan, either. 'Once we did that, the number of defaults dropped dramatically,' Lacefield said."

"Among locally based lenders, Judith Smith said she experienced a spike in defaults in loans that independent brokers brought to the lender and in January stopped accepting loan packages from brokers. 'I was having way too many defaults, so I decided not to do it,' she said. 'We did business with people I have known forever, and it probably was the luck of the draw. But I got tired of it.'"

"During the nationwide housing boom that just recently started to cool down, lenders have been offering loan terms that allowed more and more marginal borrowers to qualify for noninsured loans, and that meant less business for FHA."

"In response, Congress is considering authorizing an FHA program that would allow 100 percent loans. But several observers questioned the wisdom of such a move. Loans that finance 100 percent of the purchase price could be setting up a marginal borrower for heartache, said David O'Brien, executive director of Housing Opportunities of Fort Worth."

"In markets with little or no housing appreciation, such as much of Texas, he said, lenders do borrowers no favors by getting them into a house they can't afford or sell at a price sufficient to cover the mortgage amount."

"'Down-payment assistance versus 100 percent loans -- it's the same thing, isn't it?' said Jim Gaines of the Texas Real Estate Center at Texas A&M University. 'We have people being lent 100 percent, or more, of the home price. You're upside-down the day you move in,' he said."

"'Some of these programs, not intentionally, have the effect of putting people in a position to fail,' Lacefield said."

"Sunday afternoon, Terry Johnson walked out of a packed hotel ballroom on his way to becoming a homeowner, thanks to a $43,000 winning bid on a 1,064-square-foot home in Fort Worth. The whole process took less than two hours."

"'You get a lot better price on a home,' the disabled Fort Worth veteran said after signing some papers and handing over a deposit."

"Mr. Johnson was one of about 250 people who gathered at the DFW hotel to bid on 53 foreclosed homes that were auctioned. Interest is rising because of the soaring number of foreclosed homes, both nationwide and in Texas. Foreclosed properties now account for more than a quarter of the preowned houses on sale in the Dallas-Fort Worth area."

"With that kind of volume, some people's misfortunes are quickly becoming others' opportunities. 'If you miss a deal, there's another one coming," said Ed Massey, who came to the auction to bid on a house in Crowley. 'The economy is down, and since it's down, it's a buyers' market.'"

"Sunday's auction was the fifth one Hudson & Marshall has held in Texas in the last five days. With a weakening housing market and higher interest rates, 'there are quite a few foreclosures in the pipeline coming down,' said Dave Webb, Hudson & Marshall's co-owner."