The New York Times reports on Washington. "David Franco’s illuminated model of a proposed 10-story condominium tower dominates a sales center that, in spite of the 'Now Selling' banner still fluttering outside, is conspicuously closed for business."

"After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings."

"Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. In many cities, banks have significantly scaled back loans to condominium builders."

"Industry analysts also point out that rents may start sagging if too many condos are converted into apartments too quickly. In the Washington area late last year, some buildings in the suburbs have recently started promoting move-in specials and other incentives to lure renters."

"You can do it, but it isn’t as attractive,' Tom Meagher, a real estate consultant, said about converting condos into apartments. 'You are not going to get enough rent to cover the cost. You might have to go back and redesign the floor plans.'"

"Lenders started tightening the purse strings for the condominium market in early 2006 as sales weakened first in cities like Miami and Las Vegas. 'Did the lenders pull back soon enough?' asked Robert Brennan, managing director of real estate finance at Credit Suisse. 'I don’t think we know yet.'"

"Take the owner trying to sell a spacious two-bedroom condo for $879,000 in the former Columbia Hospital for Women, which closed in 2002, in the Foggy Bottom neighborhood of Washington. In 2004, the investor was so confident that he would make a handsome resale profit that he told his agent, Thomas P. Murphy, he wanted to buy five condos. Mr. Murphy said he flatly told his client he would only assist him in purchasing one unit in any one building."

"'He needs $890,000 to break even, but the offers are at $800,000 to $840,000,' Mr. Murphy said. Could he rent the condo? Yes, but that option is not appealing, either. Mr. Murphy estimates that the unit could rent for $4,000 a month, far short of the $6,800 a month the condo costs in mortgage interest, maintenance fees, insurance and taxes.'"

"'They have a choice of how they want to lose it,' Mr. Murphy said of investors and condo developers. 'Drip by drip or in one slap.'"

"At the end of 2006, 24,200 units were on the market in the Washington area, up from 13,000 at the start of 2005. Sales have slowed to 663 in the fourth quarter of 2006 from 3,520 in the first quarter of 2005, according to Delta Associates."

"Recorded prices have been flat, which probably masks an effective decline since only the most attractive properties are selling and many owners throw in extra inducements that do not show up in official figures."

The Washington Post. "Looking toward his retirement next year, Willie Lee Howard agreed to refinance his duplex in Northeast Washington, thinking that a fixed-rate loan would help stabilize his finances."

"What Howard got instead was a mortgage he did not understand. Baffled by the loan documents he was mailed after the closing, he consulted a lawyer and learned that he now had an interest-only loan, a new and controversial kind of mortgage. Howard was told that under its terms, his mortgage balance will rise instead of fall and that he will need to refinance in 10 years, when he may be too old to work."

"'This is a bunch of junk they done to me,' said Howard, a construction worker."

"Howard said he was persuaded to refinance his house by a 'very friendly' loan officer who called once a week for a year, telling him the time was right to stabilize his finances. After deciding to take out the loan, he said he told the lender he would need help reading the paperwork at the closing."

"It is an interest-only loan, which is designed to help wealthy people manage their cash flow, and for people whose incomes are likely to rise, not for those whose incomes, such as Howard's, are likely to fall as they retire on Social Security. The rate is fixed, but only for 10 years."

"Jim Sugarman, supervisory attorney at AARP's financial-abuse unit said Howard appears to have qualified for it with a 'no-income, no assets' loan that required minimal income documentation. 'It's a very exotic mortgage, and he had no idea he was getting that,' Sugarman said. 'He thought he was doing something smart.'"

"Sugarman said that in the past, lenders didn't make these kinds of loans because they put financial institutions at risk. What has changed is the booming market for real estate securities. Major financial institutions now put thousands of loans together and sell them in slices to investors."

"The new mortgage products have fueled record profits for the lending industry in recent years. Brokers can generate tens of thousands of dollars in additional fees."

From the Capital in Maryland. "Michael Bergeson plans to frame his tax assessment notice. The assistant state's attorney's modest waterview home on a half-acre lot in Arnold was valued at $281,000 three years ago. His latest assessment weighed in at a whopping $1.8 million, a six-fold increase in value, well above the average 55.5 percent increase seen across the county."

"Mr. Bergeson will be one of thousands of property owners appealing their home values. 'If I could sell my house for $1 million less than its assessed value, I'd be happy,' he said laughing."

"Nearly 60,000 commercial and residential properties were reassessed last year. The average property assessment statewide will go up 18.7 percent a year over the next three years, a 55.5 percent increase by 2009. The increase is less than last year's record of 20.1 percent."

"Norman Hannah plans to appeal his latest assessment as well. 'It seemed kind of ludicrous,' he said after his rancher on an acre of land near Route 50 was assessed at $574,000, a 51 percent jump over its previous assessed value."

"'Nationwide the housing market's gone flat,' the airline pilot said. 'It's in a recession.'"

"During the last round of assessments the Hannahs' home value jumped 49 percent, but the couple didn't bother to challenge the valuation. 'My wife was on my case for not appealing that one,' Mr. Hannah said ruefully as he prepares to challenge his latest assessment. 'I like Maryland, but if it gets too expensive to live here, I'll move.'"